30.7.03

ALLOCATIVE EFFICIENCY? James V. DeLong 07/29/2003 looks at the difficulties of price=marginal cost, particularly with irreversibilities and non-storability of goods. The transaction costs of negotiating a price also matters ... what would happen if coalitions of air travelers formed for the purpose of negotiating rates to occupy the empty seats on a plane about ready to push back? Could you do something similar with the queue line at a roller coaster?

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