IDEAS home Printed from https://ideas.repec.org/p/osk/wpaper/1007.html
   My bibliography  Save this paper

Optimal Public Utility Pricing: A Further Reconsideration

Author

Listed:
  • Masatoshi Yamada

    (Faculty of Economics, Osaka University)

Abstract

Pricing of public utilities has long been discussed after Hotteling (1947), and most preceding arguments have provided a negative answer to the question to attain a Pareto-efficient allocation in an economy with non-convex production possibilities. Contrasting to these, Kamiya (1995) provided an argument that it is possible to devise a pricing mechanism of non-convex technology good(s) such that the equilibrium allocation under the pricing mechanism is always Pareto-efficient. The present note intends to examine a small question to find how Kamiya fs arguemnt differs from the preceding, with an intention to clarify how the efficiency property of his pricing mechanism is secured. The reconsideration however leads to a negative result that Kamiya fs pricing mechanism will fail to assure the efficiency property in a simple illustrative economy considered by himself. We first confirms that the simple example given in Kamiya contradicts his main theorem, and then review Kamiya fs proving argument and examine where any slip remains.

Suggested Citation

  • Masatoshi Yamada, 2010. "Optimal Public Utility Pricing: A Further Reconsideration," Discussion Papers in Economics and Business 10-07, Osaka University, Graduate School of Economics.
    • Handle: RePEc:osk:wpaper:1007
    as

    Download full text from publisher

    File URL: http://www2.econ.osaka-u.ac.jp/library/global/dp/1007.pdf
    Download Restriction: no
    ---><---

    More about this item

    Keywords

    Public utility pricing; non-convex economy; Pareto-efficient allocation;
    All these keywords.

    JEL classification:

    • D51 - Microeconomics - - General Equilibrium and Disequilibrium - - - Exchange and Production Economies
    • D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:osk:wpaper:1007. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: The Economic Society of Osaka University (email available below). General contact details of provider: https://edirc.repec.org/data/feosujp.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.