Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments March 31, 2010 erstellt
Beschreibung:
In this paper, we investigate the social welfare implications of the European and American definition of affordable prices when a country is divided into independent zones. We find that the European definition is always social welfare superior, because it forces prices to be kept lower. We also introduce two new definitions of affordable prices. The first definition advocates a common price for the unprofitable area. We prove that this definition is social welfare superior to the current definitions.In the second definition denoted as {"yardstick pricing"}, we define the affordable prices for the unprofitable areas as a function that does not depend on their own zone profitable area price. We show that yardstick pricing is more efficient for social welfare when the differences in demand among zones are not very large