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Regulatory Competition in Network Interconnection Pricing

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  • Agrell Per J.

    ()
    (Louvain School of Management and CORE, Université catholique de Louvain)

  • Pouyet Jerome

    (Department of Economics, Ecole Polytechnique France)

Abstract

This paper covers network investment problems under decentralized control of regulation, infrastructure ownership and management. The model features two countries managing domestic infrastructures, used simultaneously for downstream international service provision. Initially, the welfare losses from non-cooperative investment financing policy and access pricing are derived. The impact of strategic interaction between the countries' access prices on the choice of financing policy is investigated. Under strict budget balancing, there are no incentives for efficiency improving investments. Further, investment coordination is shown useless in the absence of regulatory coordination. Illustrations from European network regulation policy for energy and rail are presented.

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Bibliographic Info

Article provided by De Gruyter in its journal Review of Network Economics.

Volume (Year): 7 (2008)
Issue (Month): 1 (March)
Pages: 1-25

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Handle: RePEc:bpj:rneart:v:7:y:2008:i:1:n:7

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Cited by:
  1. Grahn-Voorneveld, Sofia, 2011. "Sharing profit in parallel and serial transport networks," Working papers in Transport Economics 2011:7, CTS - Centre for Transport Studies Stockholm (KTH and VTI).
  2. Francesc Trillas, 2008. "Regulatory federalism in network industries," Working Papers 2008/8, Institut d'Economia de Barcelona (IEB).

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