Peak-Load Pricing: Some Further Remarks

This note takes issue with the "reconciliation" proposed by George Wilson between the Steiner and Williamson formulations of the peak-load pricing problem. Wilson respecifies weights without simultaneously addressing himself to the question of expressing output units in consonant terms. This procedure is incorrect, whence the error associated with the original Steiner formulation cannot be overcome in this way. Steiner's interpretation of his results in price discrimination rather than marginal cost pricing terms is briefly discussed. Reasons for preferring the marginal cost pricing interpretation are offered.