The Tragic Inefficiency of the M-ECPR

14 Pages Posted: 8 Feb 2010

See all articles by Nicholas Economides

Nicholas Economides

New York University - Leonard N. Stern School of Business - Department of Economics

Date Written: December 1997

Abstract

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

Suggested Citation

Economides, Nicholas, The Tragic Inefficiency of the M-ECPR (December 1997). NYU Working Paper No. IS-98-08, Available at SSRN: https://ssrn.com/abstract=1548808

Nicholas Economides (Contact Author)

New York University - Leonard N. Stern School of Business - Department of Economics ( email )

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