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Department of Economics, Lund University Working Papers, Department of Economics, Lund University

No 2005:19:
Nonlinear Pricing and the Utility Possibility Set

Tommy Andersson ()

Abstract: We consider nonlinear pricing policies that are designed by a social welfare maximizer who operates under a non-negative profit requirement. In our two-type economy, we characterize the set of all feasible nonlinear pricing policies and the frontier of the utility possibility set. Our results provide a link between distortion in consumption and individual, as well as, social welfare.

Keywords: Nonlinear Pricing; Budget-Balance; Welfare; (follow links to similar papers)

JEL-Codes: D42; D82; (follow links to similar papers)

8 pages, March 4, 2005

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