A Note on Block Tariffs

A Note on Block Tariffs Synopsis This paper has two purposes, closely connected with one another. The first is to fill a gap by presenting a consistent theory of block tariffs the second is to dispel some misconceptions found in the works of standard authors concerning this form of pricing. The main misconceptions here discussed are three in number first, that the extent to which the consumer's surplus can be exploited depends on the number of blocks second, that a lower price is necessarily ineffective if it occurs at a quantity which is larger than what the consumer would have bought had the price of the preceding block been valid throughout and third, that block tariffs may prove inefficient in practice. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Management Decision Emerald Publishing

A Note on Block Tariffs

Management Decision, Volume 17 (8): 15 – Aug 1, 1979

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Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
0025-1747
DOI
10.1108/eb001209
Publisher site
See Article on Publisher Site

Abstract

Synopsis This paper has two purposes, closely connected with one another. The first is to fill a gap by presenting a consistent theory of block tariffs the second is to dispel some misconceptions found in the works of standard authors concerning this form of pricing. The main misconceptions here discussed are three in number first, that the extent to which the consumer's surplus can be exploited depends on the number of blocks second, that a lower price is necessarily ineffective if it occurs at a quantity which is larger than what the consumer would have bought had the price of the preceding block been valid throughout and third, that block tariffs may prove inefficient in practice.

Journal

Management DecisionEmerald Publishing

Published: Aug 1, 1979

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