Ramsey's is a theory of multi-product pricing, and thus seems tailored for pricing the many kinds of railroad traffic. However, no analysis has yet been made of Ramsey prices for interline service. This paper seek to fill that gap. The conclusion is that Ramsey pricing is much more difficult than had been thought, is incompatible with deregulation, and contravenes recent transport legislation. A middle ground--breakeven pricing without collusion and cross-subsidy--does not exist. Ramsey's rules dictate total regulation of a revenue-pooling cartel. The alternative is discriminatroy pricing for maximum profit, either unrestricted or non-collusive, and with great upheaval in the through-rate system. The difficulty arises from a variety of cross-subsidies embedded in efficient transport prices; these conflict with other objectives of transport policy, such as the promotion of transport competition and adequacy of railroad revenue, and with policy measures such as the prohibition of collective rate-making and the prohibition of revenue pools. (Author)

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    London School of Economics and Political Science

    Houghton Street, Aldwych
    London WC2A 2AE,   England 
  • Authors:
    • DAMUS, S
  • Publication Date: 1984-1

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  • Accession Number: 00390984
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Dec 30 1984 12:00AM