This paper presents a diagrammatic solution to the firm’s profit-maximizing price discrimination problem in the face of capacity constraints. Airlines, hotels, and other firms practice yield management, allocating fixed capacity to customer groups paying different prices. In these cases, the...

The international development community has encouraged investment in physical and human capital as a precursor to economic progress. Recent evidence shows, however, that increases in capital do not always lead to increases in output. We develop a growth model where the allocation and...