Delegating Infrastructure Projects with Open Access
AbstractThis paper provides a simple model that examines a firmfs incentive to invest in a network infrastructure through coalition formation in an open access environment with a deregulated retail market. A regulator faces a dilemma between inducing an incentive for efficient investment and reducing the distortion generated by imperfect competition. We show that, in such a case, the degree of cost-reducing effect of the investment is crucial from a welfare point of view. In particular, when network investment through coalition formation creates a large (small) cost-reducing effect, the regulator can (should not) delegate an investment decision to firms with an appropriate level of access charge.
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Bibliographic InfoArticle provided by Springer in its journal Journal of Economics.
Volume (Year): 88 (2006)
Issue (Month): 3 (09)
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Web page: http://www.springerlink.com/link.asp?id=108909
network infrastructure; coalition; access charge; delegation; L13; L22; L43; L90;
Other versions of this item:
- Keizo Mizuno & Testuya Shinkai, 2006. "Delegating Infrastructure Projects with Open Access," Discussion Paper Series 28, School of Economics, Kwansei Gakuin University, revised Jan 2006.
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
- L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
- L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General
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- Knut Einar Rosendahl & Eirik Lund Sagen, 2009.
"The Global Natural Gas Market: Will Transport Cost Reductions Lead to Lower Prices?,"
The Energy Journal,
International Association for Energy Economics, vol. 0(Number 2), pages 17-40.
- Knut Einar Rosendahl & Eirik Lund Sagen, 2007. "The Global Natural Gas Market. Will transport cost reductions lead to lower prices?," Discussion Papers 523, Research Department of Statistics Norway.
- Toshihiro Matsumura & Noriaki Matsushima, 2012. "Regulated Input Price, Vertical Separation, and Leadership in Free Entry Markets," ISER Discussion Paper 0853, Institute of Social and Economic Research, Osaka University.
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