The Price System vs. Rationing: An Extension

Elaborating on the analysis of Weitzman, this note examines how the comparative effectiveness of the price system vs. rationing is affected when planners face a cubic loss function. It is shown that the comparative advantage of the price system over rationing will depend on the skewness of income distribution as well as on the aversion of the planners towards underfulfillment of the consumers' allocation plan.

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Year of publication:	1981
Authors:	Rivera-Batiz, Francisco
Published in:	Bell Journal of Economics. - The RAND Corporation, ISSN 0361-915X. - Vol. 12.1981, 1, p. 245-248
Publisher:	The RAND Corporation

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Extent:	application/pdf
Type of publication:	Article
Source:	RePEc - Research Papers in Economics

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