1. As put by A. E. Kahn: ‘The only economic function of price is to influence behavior. This is a notion that traditional regulators have great difficulty accepting.’ Public Utilities Fortnightly, 101, 13–17 (19 January 1978). See any economics textbook for a detailed exposition — for example, W. J. Baumol and A. S. Blinder, Economics: Principles and Policy (New York: Harcourt, Brace, Jovanovich, 1979 ) pp. 590–602.
2. See R. D. Willig, ‘Pareto-superior Nonlinear Outlay Schedules’, The Bell Journal of Economics, 9, 56–69 (Spring 1978 ).
3. See R. Braeutigam, (1979) ‘Optimal Pricing With Intermodal Competition’, American Economic Review, 69, 38–49.
4. W. J. Baumol, J. C. Panzar and R. D. Willig (1982) Contestable Markets and the Theory of Industry Structure (New York: Harcourt, Brace, Jovanovich).
5. W. J. Baumol, E. D. Bailey and R. D. Willig, ‘Weak Invisible Hand Theorems on the Sustainability of Prices in a Multiproduct Monopoly,’ American Economic Review, 67, 350–65 (June 1977).