Capacity-Contingent Nonlinear Pricing by Regulated Firms, Journal of Regulatory Economics
Second-best Pareto optimal pricing by a regulated firm subject to demand and capacity shocks is examined. Nonlinear price schedules for the firm's customers are obtained that are contingent on capacity realizations. The second-best Pareto optimal mechanism also is implemented by an allocation mechanism based on the consumer's choice of a minimum demand or firm power level. The optimal mechanism is implemented as well by a general form of priority pricing.
Spulber, Daniel. 1992. Capacity-Contingent Nonlinear Pricing by Regulated Firms. Journal of Regulatory Economics. 4(4): 299-319.