Optimal public rationing and price response
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Accès restreint UNIL
Etat: Public
Version: de l'auteur⸱e
ID Serval
serval:BIB_666C70C60F12
Type
Rapport: document publié par une institution, habituellement élément d'une série.
Sous-type
Working paper: document de travail dans lequel l'auteur présente les résultats de ses travaux de recherche. Les working papers ont pour but de stimuler les discussions scientifiques avec les milieux intéressés et servent de base pour la publication d'articles dans des revues spécialisées.
Collection
Publications
Institution
Titre
Optimal public rationing and price response
Détails de l'institution
Boston University, Department of Economics
Date de publication
2009
Numéro
2009-008
Genre
Working paper
Langue
anglais
Nombre de pages
33
Résumé
We study optimal public rationing of an indivisible good and private sector price responses. Consumers differ in their wealth and costs of provisions. Due to a limited budget, some consumers must be rationed. Public rationing determines the characteristics of consumers who seek supply from the private sector, where a firm sets prices based on consumers' cost information and in response to the rationing rule. We consider two information regimes. In the first, the public supplier rations consumers according to their wealth information. In equilibrium, the public supplier must ration both rich and poor consumers. Supplying all poor consumers would leave only rich consumers in the private market, and the firm would react by setting a high price. Rationing some poor consumers is optimal, and implements price reduction in the private market. In the second information regime, the public supplier rations consumers according to consumers' wealth and cost information. In equilibrium, consumers are allocated the good if and only if their costs are below a threshold. Wealth information is not used. Rationing based on cost results in higher equilibrium total consumer surplus than rationing based on wealth. [Authors]
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Création de la notice
19/10/2010 8:44
Dernière modification de la notice
20/08/2019 15:22