TY  - JOUR
AU  - Arnott,Richard
AU  - Kraus,Marvin
TI  - The Ramsey Problem for Congestible Facilities
JF  - National Bureau of Economic Research Technical Working Paper Series
VL  - No. 84
PY  - 1994
Y2  - May 1994
UR  - http://www.nber.org/papers/t0084
L1  - http://www.nber.org/papers/t0084.pdf
N1  - Author contact info:
Richard J. Arnott
Department of Economics
Boston College
Chestnut Hill, MA 02467
Tel: 617/552-3674
Fax: 617/552-2308
E-Mail: richard.arnott@ucr.edu
AB  - 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.
ER  -