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Rationing, Queues, and Black Markets

Victor Polterovich

Abstract

Several types of rationing and queue mechanisms are compared in a framework of general equilibrium type models under gross substitutability and normality assumptions about consumers' Marshallian demand. During transition from rationing and queues to a market system, a group of low income people loses. The transition involves larger losses for this group if black markets prevail under rationing or queues, while a group of high income consumers gains. Some other comparative statics results are developed for a queue model with black markets.