Access

You are not currently logged in.

Access your personal account or get JSTOR access through your library or other institution:

login

Log in to your personal account or through your institution.

If You Use a Screen Reader

This content is available through Read Online (Free) program, which relies on page scans. Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.

Second-Best Pricing and Cooperation

Daniel F. Spulber
The RAND Journal of Economics
Vol. 17, No. 2 (Summer, 1986), pp. 239-250
Published by: Wiley on behalf of RAND Corporation
Stable URL: http://www.jstor.org/stable/2555387
Page Count: 12
  • Read Online (Free)
  • Download ($24.00)
  • Subscribe ($19.50)
  • Cite this Item
Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Second-Best Pricing and Cooperation
Preview not available

Abstract

This article studies pricing for natural monopolies by using a cooperative game of joint production. Outputs are allocated by a price system. We introduce the concept of the second-best core, which is a subset of the set of zero-profit, second-best Pareto-optimal prices. Prices are such that no group of consumers subsidizes the purchase of another group. We consider the relations among the second-best core and sustainability, supportability, and natural monopoly. For specific preferences and technology we demonstrate the existence of the second-best core. We design a market mechanism for franchise allocation, which achieves second-best pricing without price regulation.

Page Thumbnails

  • Thumbnail: Page 
239
    239
  • Thumbnail: Page 
240
    240
  • Thumbnail: Page 
241
    241
  • Thumbnail: Page 
242
    242
  • Thumbnail: Page 
243
    243
  • Thumbnail: Page 
244
    244
  • Thumbnail: Page 
245
    245
  • Thumbnail: Page 
246
    246
  • Thumbnail: Page 
247
    247
  • Thumbnail: Page 
248
    248
  • Thumbnail: Page 
249
    249
  • Thumbnail: Page 
250
    250