Abstract
After the Second World War, optimal pricing in the public sector became an important topic internationally. The welfare enhancing properties of marginal pricing were a key concern, yet, the technical computation of marginal costs also proved difficult. It was unclear how to compute marginal costs, mainly in view of the discontinuities of the cost function. In the context of post-war reconstruction and of practically implementing a marginal pricing policy, this technical debate was closely linked in France to the “Calais traveller paradox” and the emergence of a new generation of engineer-economists contributing at the same time to the theoretical debate and to the practical implementation of marginal cost pricing. Maurice Allais and Marcel Boiteux, as well as Gabriel Dessus and Roger Hutter contributed to developing national solutions that also spread theoretical thinking internationally. This debate connects with the history of economic calculus and the rise of public economics, as well as the possibility of computing optimal welfare enhancing prices in the face of market failures.
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