IS EQUITY A CONSTRAINT? APPLICATIONS TO BLOCK RATE AND OTHER PRICING SCHEMES WITH HETEROGENEOUS USERS

Abstract

In this paper, we model the trade-off between equity and efficiency in a market for a resource when users of that resource are heterogeneous. We develop the analytical model, and show that under certain circumstances efficiency can be achieved in a manner that also reduces inequality. We also illustrate these results through the use of simulation methods.Research Methods/ Statistical Methods,