The Tragic Inefficiency of the M-ECPR
14 Pages Posted: 8 Feb 2010
Date Written: December 1997
We show that application of the so-called "Market Determined Efficient Component Pricing Rule," the "Efficient Component Pricing Rule," and, in general, of pricing rules that are based on private opportunity costs would perpetuate pricing inefficiencies and result in lower social surplus than pricing which is based on social opportunity cost rather than private opportunity costs.
Keywords: Networks, Access, Complementarity, Public Policy
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