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Should uniform pricing constraints be imposed on entrants?

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Author Info
Steffen Hoernig ()

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Abstract

This paper analyzes uniform pricing, coverage constraints and price caps in markets newly opened to competition, e.g. broadband services. We show that the requirement of uniform pricing has strong repercussions on coverage decisions. Imposed on incumbents only it may distort their coverage decision downward to avoid duopoly entry. If also imposed on entrants it increases the likelihood that entry leads to independent monopolies rather than competition. A sufficiently large coverage constraint on incumbents reestablishes incentives for duopoly entry, but may lead to higher prices. Copyright Springer Science+Business Media, LLC 2006

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File URL: http://hdl.handle.net/10.1007/s11149-006-0013-6
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Publisher Info
Article provided by Springer in its journal Journal of Regulatory Economics.

Volume (Year): 30 (2006)
Issue (Month): 2 (08)
Pages: 199-216
Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Handle: RePEc:kap:regeco:v:30:y:2006:i:2:p:199-216

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Web page: http://www.springerlink.com/link.asp?id=100298

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Related research
Keywords: Uniform pricing; Coverage constraints; Price caps; Entry; L43; L51; L52;

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Steffen Hoernig, 2006. "Should uniform pricing constraints be imposed on entrants?," Journal of Regulatory Economics, Springer, vol. 30(2), pages 199-216, 08. [Downloadable!] (restricted)
    Other versions:
  2. Foros, Oystein & Kind, Hans Jarle, 2003. "The Broadband Access Market: Competition, Uniform Pricing and Geographical Coverage," Journal of Regulatory Economics, Springer, vol. 23(3), pages 215-35, May. [Downloadable!] (restricted)
  3. Jean-Jacques Laffont & Jean Tirole, 2001. "Competition in Telecommunications," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262621509, December.
  4. Chone, Philippe & Flochel, Laurent & Perrot, Anne, 2000. "Universal service obligations and competition," Information Economics and Policy, Elsevier, vol. 12(3), pages 249-259, September. [Downloadable!] (restricted)
  5. Valletti, Tommaso M & Hoernig, Steffen & Barros, Pedro P, 2002. "Universal Service and Entry: The Role of Uniform Pricing and Coverage Constraints," Journal of Regulatory Economics, Springer, vol. 21(2), pages 169-90, March. [Downloadable!] (restricted)
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  6. Hoerning, Steffen, 2002. "Should Uniform Pricing Constraints be Imposed on Entrants?," FEUNL Working Paper Series wp417, Universidade Nova de Lisboa, Faculdade de Economia. [Downloadable!]
  7. Armstrong, Mark & Vickers, John, 1993. "Price Discrimination, Competition and Regulation," Journal of Industrial Economics, Blackwell Publishing, vol. 41(4), pages 335-59, December. [Downloadable!] (restricted)
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  8. Faulhaber, Gerald R & Hogendorn, Christiaan, 2000. "The Market Structure of Broadband Telecommunications," Journal of Industrial Economics, Blackwell Publishing, vol. 48(3), pages 305-29, September. [Downloadable!] (restricted)
  9. Anton, James J. & Vander Weide, James H. & Vettas, Nikolaos, 2002. "Entry auctions and strategic behavior under cross-market price constraints," International Journal of Industrial Organization, Elsevier, vol. 20(5), pages 611-629, May. [Downloadable!] (restricted)
  10. Fudenberg, Drew & Tirole, Jean, 1984. "The Fat-Cat Effect, the Puppy-Dog Ploy, and the Lean and Hungry Look," American Economic Review, American Economic Association, vol. 74(2), pages 361-66, May. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hoernig, Steffen, 2005. "Should Uniform Pricing Contraints be Imposed on Entrants?," CEPR Discussion Papers 5052, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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