We study a multi-marginal optimal transportation problem with cost function of the form $c(x_{1}, \ldots,x_{m})=\sum_{k=1}^{m-1}|x_{k}-x_{k+1}|^{2} + |x_{m}- F(x_{1})|^{2}$, where $F: \mathbb{R}^...

User fees for municipal services may generate revenue for municipalities and their utility commissions, but they are equally important as prices for those services. Pricing services at marginal cost can lead to efficient production and consumption of the service, and efficient allocation of the service when capacity limits are reached; and it can help to guide investment on an efficient basis. ...

Theoretical models of the markup-inflation relationship focus on the markup of price on marginal costs in contrast with empirical models that typically focus on the markup on unit costs. Using nearly 50 years of quarterly United States data we identify a negative long-run relationship between inflation and the markup of price on unit costs on the one hand and with the markup on marginal costs o...

This paper proposes a theory of price rigidity consistent with survey evidence that firms stabilize prices out of fairness to their consumers. The theory relies on two psychological assumptions. First, customers care about the fairness of prices: fixing the price of a good, consumers enjoy it more at a low markup than at a high markup. Second, customers underinfer marginal costs from prices: wh...

We present a model of price leadership on homogeneous product markets where the price leader is selected endogenously. The price leader sets and guarantees a sales price to which followers can adjust according to their individual supply functions. The price leader then clears the market by serving the residual demand. Firms with different marginal costs would induce different prices if they wer...

A basic tenet of microeconomics is that for a competitive industry in equilibrium the market price of a product will be equal to its marginal cost. This paper develops a model framework and a corresponding empirical inference procedure for estimating longrun marginal cost in industries where production costs decline over time. In the context of the solar photovoltaic (PV) module industry, we re...