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OPTIMAL PRICES AND ANIMAL CONSUMERS IN CONGESTED MARKETS
Author(s) -
BATTALIO RAYMOND C.,
KAGEL JOHN H.,
PHILLIPS OWEN R.
Publication year - 1986
Publication title -
economic inquiry
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.823
H-Index - 72
eISSN - 1465-7295
pISSN - 0095-2583
DOI - 10.1111/j.1465-7295.1986.tb01805.x
Subject(s) - trips architecture , consumption (sociology) , microeconomics , economics , commodity , product (mathematics) , pareto principle , computer science , operations management , finance , social science , geometry , mathematics , sociology , parallel computing
We argue that congestion, when it affects the consumption of a commodity, ought to be measured by the product of the number of trips made to a seller and consumption per visit. When intensity of consumption is measured this way, uniform entry fees, the most common way of pricing congested goods, become nonoptimal. A strict user charge can be Pareto efficient. If a uniform entry fee is practiced, we present a model along with experimental data from diverse species subject groups that show consumers reduce visits and consume more per visit; this behavior may intensify the congestion problem.