
doi: 10.2307/2527141
Summary: Nonlinear pricing is extended to allow for demand, cost and capacity uncertainty. Incentive schedules are developed that implement the Pareto optimal allocation. Consumers choose a reference point, e.g., baseload demand. This determines both their payment level and the state-contingent output allocation. The approximate efficiency of alternative implementation procedures, with discrete customer classes and with a linear prorated service rule, is also examined.
nonlinear pricing, demand, cost and capacity uncertainty, General equilibrium theory, Microeconomic theory (price theory and economic markets), Pareto optimal allocation
nonlinear pricing, demand, cost and capacity uncertainty, General equilibrium theory, Microeconomic theory (price theory and economic markets), Pareto optimal allocation
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