| Abstract: | The local telecommunication pricing decision on residential, business, and private lines is modeled. This study demonstrates that when regulators use a weighted sum linear goal programming model to determine prices, adjustments can be made to Ramsey prices that reflect the regulators’ concerns about the trade-off of fairness with efficiency. An actual example shows that when regulators’ preferences were taken into account, residential prices were 14 percent lower than efficient optimal Ramsey prices. |
