Comparison of investment regimes with cost-based access pricing rules
AbstractThis paper examines a network owner's incentive for access innovation (i.e., the reduction of access cost) and compares two investment regimes (cooperation and noncooperation) under cost-based access pricing rules. When the access pricing rule is based on access cost, it brings about a spillover effect. It is then shown that when the spillover effect is large (small), a cooperative investment regime achieves a lower (higher) access cost than a noncooperative investment regime. In addition, when a regulator adopts an incremental access cost rule that requires the access charge to equal the access cost, a cooperative investment regime achieves greater social welfare than a noncooperative investment regime.
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Bibliographic InfoArticle provided by Elsevier in its journal Japan and the World Economy.
Volume (Year): 21 (2009)
Issue (Month): 3 (August)
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Web page: http://www.elsevier.com/locate/inca/505557
Access charge Access innovation Cooperation;
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- Foros, Oystein, 2004. "Strategic investments with spillovers, vertical integration and foreclosure in the broadband access market," International Journal of Industrial Organization, Elsevier, vol. 22(1), pages 1-24, January.
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