Compliance and Regulation Law bilingual Dictionnary


by Marie-Anne Frison-Roche

On markets, prices result in competition. They are "exact" in that they express the meeting of offers and demands, and are sometimes even called "fair prices". Prices are free and constitute the indices of free competition. The simplest and most serious anti-competitive clue is thus abnormal prices. In the same way, the financial market has been qualified by Walras as the "purest market" notably by the quotation which mechanically crystallizes the instantaneousness of the meeting of offers and demands by the mobility of prices.

Freedom of competition and contractual freedom have the price as a paradoxical commun point, since both parties use the autonomy of their will to determine freely the price, an essential element of the contract, and it is nevertheless the market which by their "law" brings out a "market price that each contract reflects.

But this correctness of price does not exclude a price being "unfair" for example when it is too high for the consumer while it is a necessary good, or even a "common good" for which everyone should have a "right of access" and that in fact the rarity of this one has raised the price. The "fair price" can then be equal to 0, when it realizes such a fundamental right of access and that, rather than solvabilizing the demand, the political choice is made to declare free: free museums one day a week , free education, etc.

The amount at which the good is going to be offered to the applicant can then result not so much from a price but from a tariff. One has left the merely competitive market logic to enter the logic of Regulation Law.

This corresponds to two hypotheses. First, when there is a monopoly, by definition the absence of competition precluding the development of a price which presupposes competitive pressure, an amount must be fixed by calculation, possibly by reconstituting a hypothetical market, France has been particularly successful in its capacity to develop pricing models for electricity (eg Ramsey-Boiteux) or for telecommunications (eg Laffont-Tirole calculations). Pricing is an art because the company must be encouraged not to make excessive rents while making the necessary investments. Thus, the British preferred tariffs by price cap, while the French favored pricing by costs, the European institutions admitting both.

Secondly, pricing can be no longer economic or political when it comes to imposing an amount that is not a market price for the benefit of people who would not have the financial means to enter a market. The social tariffs are then aimed at regulated goods only if they contain common goods such as telephone or electricity, each of which must have access, even at very modest income. It is then for the Legislator to concretize subjective rights that he creates, such as the "right to electricity"

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