The Tragic Inefficiency of M-Ecpr
New York University, Center for Law and Business, Working Paper No. 98-003
18 Pages Posted: 28 Apr 1998
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.
JEL Classification: L13, L40
Suggested Citation: Suggested Citation