Template-Type: ReDIF-Article 1.0
Author-Name:  Ira Horowitz
Author-Name:  Dewey Seeto 
Author-Name:  Chi-Keung Woo
Title:  Ramsey Pricing of Electricity Under Unknown Bypass Costs
Classification-JEL: F0
Pages:  59-77
Volume:  Volume17
Issue:  Number 2
Year:  1996
Abstract:  This paper derives Ramsey prices for the realistic situation in which bypass costs are unknown to both a regulator and an electric utility, in particular, to any useful level of precision. It is shown that the traditional inverse elasticity rule will still yield Ramsey prices that are incentive compatible. The Ramsey prices require relatively little information to implement, and we show the relevant elasticities to use. Modifications of these Ramsey prices that account for political realities are also provided.
Handle: RePEc:aen:journl:1996v17-02-a04
File-URL: http://www.iaee.org/en/publications/ejarticle.aspx?id=1223
File-Format: text/html
File-Restriction: Access to full text is restricted to IAEE members and subscribers.