Econometrica: Jan 1991, Volume 59, Issue 1

The Optimality of Boiteux-Ramsey Pricing

https://doi.org/0012-9682(199101)59:1<99:TOOBP>2.0.CO;2-W
p. 99-121

Egbert Dierker

Consider an economy with one public enterprise that is subject to a budgetary constraint and charges prices according to the first order necessary conditions suggested by Boiteux (1956) or, in another context, by Ramsey (1927). We state (restrictive) conditions sufficient to ensure that the resulting allocation is second best.

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