Regulation and access pricing with asymmetric information
AbstractWe study in this paper whether the price charged to a competitor for the use of an essential input produced in conditions of natural monopoly should reflect only considerations of relative efficiency between the various potential suppliers. In a model that captures the technological conditions operating in industries such as telephony, gas, rail, where access to a distribution network is essential to the ability to compete, we show that this is not the case. Instead, the access price should be set `pro-competitively': it may be socially optimal to award production to a firm less efficient than the owner of the network.
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Bibliographic InfoArticle provided by Elsevier in its journal European Economic Review.
Volume (Year): 43 (1999)
Issue (Month): 1 (January)
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Web page: http://www.elsevier.com/locate/eer
Other versions of this item:
- Gianni De Fraja, . "Regulation and Access Pricing with Asymmetric Information," Discussion Papers 95/5, Department of Economics, University of York.
- De Fraja, Gianni, 1995. "Regulation and Access Pricing with Asymmetric Information," CEPR Discussion Papers 1122, C.E.P.R. Discussion Papers.
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
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