A pricing proposal: regulation, nonlinear pricing and self-selecting tariffs

In this post, James Alleman focuses on the negative welfare effects of the typical pricing structures found in the ICT sector. To enhance welfare, the author suggests, regulators should require ICT firms to bill their consumers the “best” price structure for their usage ex post, instead of making consumers to select a package ex ante. It is suggested that this pricing policy would allow society to reap the savings and welfare benefits of nonlinear pricing.