Efficiency and marginal cost pricing in dynamic competitive markets with friction

  title={Efficiency and marginal cost pricing in dynamic competitive markets with friction},
  author={In-Koo Cho and Sean P. Meyn},
  journal={2007 46th IEEE Conference on Decision and Control},
This paper examines market models with supply friction. We examine a competitive equilibrium model, and a monopolistic model in which a single firm determines the market price. The following conclusions are obtained: (i) if friction is present, no matter how small, then the market prices fluctuate between zero and the "choke-up" price, without any tendency to converge to the marginal production cost, exhibiting considerable volatility. This conclusion holds for both the competitive equilibrium… CONTINUE READING
Highly Influential
This paper has highly influenced 10 other papers. REVIEW HIGHLY INFLUENTIAL CITATIONS
Highly Cited
This paper has 49 citations. REVIEW CITATIONS

From This Paper

Figures, tables, and topics from this paper.


Publications citing this paper.
Showing 1-10 of 34 extracted citations


Publications referenced by this paper.
Showing 1-10 of 35 references

Lessons From the California ”Apocalypse:” Jurisdiction Over Electric Utilities,

  • N. W. Fels, F. R. Lindh
  • Energy Law Journal,
  • 2001
Highly Influential
4 Excerpts

Dynamic pricing and inventory control for multiple products,

  • D. Bertsimas, S. d. Boer
  • J. of Revenue and Pricing Management,
  • 2005
Highly Influential
6 Excerpts

The Trouble With Electricity Markets and California’s Electricity Restructuring Disaster,

  • S. Borenstein
  • Proceedings of the Hoover Institution and…
  • 2001
Highly Influential
3 Excerpts

Similar Papers

Loading similar papers…