WHEN DO CONSUMERS FAVOR PRICE INCREASES: WITH APPLICATIONS TO CONGESTION AND TO REGULATION

摘要: For a conventional good, an increase in price reduces the consumer surplus of both those who no longer buy and continue to it. If, however, consumers must spend real resources obtain rights for he or if quality depends on number other trying same then may have different effects. Both characteristics apply congestible goods: consumer's utility decreases pays persons use good. Some users gain from which demand. Therefore, even revenue is not returned users, their welfare can increase. The change appears be particularly important asessing political popularity road tolls. We inquire here into conditions under imposing congestion toll will prove politically acceptable. Political acceptance, we suppose, greater increases when users.