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Supportability, Sustainability and Subsidy Free Prices

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  • Leonard J. Mirman

Abstract

This article studies the relationships among the concepts of subsidy-free prices, anonymously equitable prices, supportability, and sustainability. In particular, we set out conditions under which these concepts are not vacuous. Several new sets of conditions under which a subsidy-free price vector is sustainable are also presented. For general, nonseparable demands, we establish the existence of an Aumann-Shapley price vector that is anonymously equitable and sustainable.
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  • Leonard J. Mirman, 1983. "Supportability, Sustainability and Subsidy Free Prices," Discussion Papers 563, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
    • Handle: RePEc:nwu:cmsems:563
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    References listed on IDEAS

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    1. Baumol, William J, 1982. "Contestable Markets: An Uprising in the Theory of Industry Structure," American Economic Review, American Economic Association, vol. 72(1), pages 1-15, March.
    2. Faulhaber, Gerald R, 1975. "Cross-Subsidization: Pricing in Public Enterprises," American Economic Review, American Economic Association, vol. 65(5), pages 966-977, December.
    3. Sharkey, William W. & Telser, Lester G., 1978. "Supportable cost functions for the multiproduct firm," Journal of Economic Theory, Elsevier, vol. 18(1), pages 23-37, June.
    4. Mirman, Leonard J. & Tauman, Yair & Zang, Israel, 1986. "Ramsey prices, average cost prices and price sustainability," International Journal of Industrial Organization, Elsevier, vol. 4(2), pages 123-140, June.
    5. ten Raa, Thijs, 1983. "Supportability and anonymous equity," Journal of Economic Theory, Elsevier, vol. 31(1), pages 176-181, October.
    6. John C. Panzar & Robert D. Willig, 1977. "Free Entry and the Sustainability of Natural Monopoly," Bell Journal of Economics, The RAND Corporation, vol. 8(1), pages 1-22, Spring.
    7. William W. Sharkey, 1981. "Existence of Sustainable Prices for Natural Monopoly Outputs," Bell Journal of Economics, The RAND Corporation, vol. 12(1), pages 144-154, Spring.
    8. Leonard J. Mirman & Yair Tauman, 1982. "Demand Compatible Equitable Cost Sharing Prices," Mathematics of Operations Research, INFORMS, vol. 7(1), pages 40-56, February.
    9. Louis J. Billera & David C. Heath, 1982. "Allocation of Shared Costs: A Set of Axioms Yielding A Unique Procedure," Mathematics of Operations Research, INFORMS, vol. 7(1), pages 32-39, February.
    10. Faulhaber, Gerald R & Levinson, Stephen B, 1981. "Subsidy-Free Prices and Anonymous Equity [Cross-Subsidization: Pricing in Public Enterprises]," American Economic Review, American Economic Association, vol. 71(5), pages 1083-1091, December.
    11. Baumol, William J & Bailey, Elizabeth E & Willig, Robert D, 1977. "Weak Invisible Hand Theorems on the Sustainability of Multiproduct Natural Monopoly," American Economic Review, American Economic Association, vol. 67(3), pages 350-365, June.
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    Cited by:

    1. David Encaoua & Michel Moreaux, 1987. "L'analyse théorique des problèmes de tarification et d'allocation des coûts dans les télécommunications," Revue Économique, Programme National Persée, vol. 38(2), pages 375-414.
    2. Vincent Iehlé, 2009. "Sustainability In A Multiproduct And Multiple Agent Contestable Market," Bulletin of Economic Research, Wiley Blackwell, vol. 61(2), pages 151-164, April.
    3. repec:dau:papers:123456789/84 is not listed on IDEAS
    4. Dreze, Jacques & Le Breton, Michel & Savvateev, Alexei & Weber, Shlomo, 2006. "0.19% Subsidy-Free Spatial Pricing," IDEI Working Papers 423, Institut d'Économie Industrielle (IDEI), Toulouse.
    5. Vincent Iehlé, 2004. "Stable pricing in monopoly and equilibrium-core of cost games," Cahiers de la Maison des Sciences Economiques b05023, Université Panthéon-Sorbonne (Paris 1).
    6. Bogetoft, Peter & Hougaard, Jens Leth & Smilgins, Aleksandrs, 2016. "Applied cost allocation: The DEA–Aumann–Shapley approach," European Journal of Operational Research, Elsevier, vol. 254(2), pages 667-678.

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