One of the merits claimed for certain types of price-cap regulation is the possible long-run convergence of the prices of multi-product firms to Ramsey prices. Typically such regulated firms define commodities by such devices as dividing the day into discrete periods, customers into age-groups,...

Prospect theory is the main behavioral alternative to expected utility. Tversky and Kahnemann (1992) motivate the utility function for gains and losses under prospect theory by using the axiom of preference homogeneity. However, they do not provide the formal proof. We provide the relevant...