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Access pricing in network industries with mixed oligopoly

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  • Shana Cui

    (University of Florida)

  • David E. M. Sappington

    (University of Florida)

Abstract

We characterize optimal regulated access prices in mixed oligopoly network industries where a private, profit-maximizing firm competes against a public enterprise after purchasing an essential input (e.g., network access). Optimal access prices often are lower for the private firm than for the public enterprise, and can be particularly low for a relatively efficient private supplier. In contrast to a private, profit-maximizing input supplier, the regulator reduces the access price charged to a private supplier as it becomes more efficient. The optimal access price for a private firm is the same whether it competes against another private firm or a public enterprise.

Suggested Citation

  • Shana Cui & David E. M. Sappington, 2021. "Access pricing in network industries with mixed oligopoly," Journal of Regulatory Economics, Springer, vol. 59(3), pages 193-225, June.
    • Handle: RePEc:kap:regeco:v:59:y:2021:i:3:d:10.1007_s11149-021-09427-2
    DOI: 10.1007/s11149-021-09427-2
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