The Ramsey Problem for Congestible Facilities / Richard Arnott, Marvin Kraus.

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Arnott, Richard

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Material type: Text

TextSeries: Technical Working Paper Series (National Bureau of Economic Research) ; no. t0084.Publication details: Cambridge, Mass. National Bureau of Economic Research 1994.Description: 1 online resource: illustrations (black and white)Online resources:

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Abstract: In recent years, a new set of models drawing on Vickrey [1969] has been developed to analyze the economics of congestible facilities. These models are structural in that they derive the cost function from consumers' time-of-use decisions and the congestion technology. Standard models, in contrast, simply assume the general form of the cost function. We apply the new approach to analyze the Ramsey problem for a congestible facility, and show that the solution generally entails cost inefficiency. Standard models have failed to reveal this result because they treat the cost function as completely determined by technology.

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Item type	Home library	Collection	Call number	Status	Date due	Barcode	Item holds
Working Paper	Biblioteca Digital	Colección NBER	nber t0084 (Browse shelf(Opens below))	Not For Loan

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Previous	nber t0081 The Influence Of Probability on Risky Choice: A parametric Examination /	nber t0082 The Positive Economics of Methodology /	nber t0083 A Simple MLE of Cointegrating Vectors in Higher Order Integrated Systems /	nber t0084 The Ramsey Problem for Congestible Facilities /	nber t0085 On the Formulation of Uniform Laws of Large Numbers: A Truncation Approach /	nber t0086 Efficient Estimation of Linear Asset Pricing Models with Moving-Average Errors /	nber t0087 Simulated Moments Estimation of Markov Models of Asset Prices /	Next

May 1994.

In recent years, a new set of models drawing on Vickrey [1969] has been developed to analyze the economics of congestible facilities. These models are structural in that they derive the cost function from consumers' time-of-use decisions and the congestion technology. Standard models, in contrast, simply assume the general form of the cost function. We apply the new approach to analyze the Ramsey problem for a congestible facility, and show that the solution generally entails cost inefficiency. Standard models have failed to reveal this result because they treat the cost function as completely determined by technology.