DECENTRALIZED PRICING MANAGEMENT IN HOUSING AND MUNICIPAL ECONOMY

In the world practice certain methods of pricing under natural monopoly were formed. The analysis of the essence and peculiarities of these methods to adopt the best practices: а) Rate of return regulation. This is the most traditional approach to set price of goods (services) of natural monopolies. It is based on cost-plus pricing calculation. It is used in Ukraine. b) Price cap regulation (price restrictions). The method`s essence is to set fixed maximum price limitations by the regulatory institution. The institution has the right to set the price, which is lower or equals the limit, and to profit. As the profit does not correlate to costs, there is the stimulating mechanism to cut them. The model assumes quite a long period between tariff revisions – 4-5 years. c) Profit-sharing plan with sliding scale. Unlike the previous method, in which natural monopoly gains significant profits, this method assumes to use the sliding scale of profit distribution between a producer and a consumer. d) Price discrimination. Price discrimination is a pricing strategy that charges customers or their groups' different prices for the same product or service. Price difference does not depend on production costs or supply costs. Price discrimination is possible if consumers` direct price elasticity of demand is different. Conclusions. The analysis of the natural monopoly`s world pricing practice, including national housing and utilities sector has been carried out. It has been stated that the main methods of monopolistic pricing are: rate of return regulation; price cap regulation (price restrictions); profit-sharing plan with sliding scale; price discrimination; multi-rate tariffs; pricing for different competition forms, compatible with natural monopoly. The obtained findings prove the necessity of modification to the housing and utilities sector's monopoly market by implementation of competition elements.