6) The results obtained with
two-part tariffs are analogous to the ones that were obtained with linear pricing: with expost licensing the technology of the stand-alone upstream firm is excluded from the standard, and for ex-post licensing to be preferred by SSO members to ex-ante licensing it is necessary that the rents that the vertically integrated firm [V.
Davis, "The Equity and Efficiency of
Two-Part Tariffs in U.
Usually
two-part tariffs distinguish between average and marginal payment [1].
In addition to constructing a framework for evaluations of the emerging carbon offset market, the article makes two contributions to the theoretical literature on efficient pricing with
two-part tariffs.
carriers would use a menu of
two-part tariffs, not three-part tariffs.
General theory is covered in sections on marginal cost pricing, Ramsey pricing, peak load pricing, pricing under uncertainty,
two-part tariffs and nonlinear pricing, and game theoretic approaches.
Although such a tariff cannot coordinate the channel, it is the best of all possible
two-part tariffs from the viewpoint of maximizing manufacturer profit.
Willig(1978) showed that offering optional
two-part tariffs can cause a Pareto improvement, as long as all customers are final consumers and the existing tariff is retained as an option.
To reach optimality requires
two-part tariffs or other complicated nonlinear pricing schemes.
Also, when the regulated firm moves from linear price to uniform
two-part tariffs, the smaller users lose more of their consumer surplus than the larger users.
This explains why the unit wholesale price--and thus demand-enhancing noncontractible investments--may be lower with
two-part tariffs than without them.
Since residential local phone service is sold under a menu of
two-part tariffs, the authors develop a method for estimating a mixed discrete/continuous demand model.
