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Competizione tra reti e incentivi all'investimento nelle telecomunicazioni

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  • Carlo CAMBINI

    ()
    (Politecnico di Torino e HERMES)

  • Tommaso VALLETTI

Abstract

This paper first summarises the main results of the recent literature on competition in telecommunication networks, based on the models of Armstrong (1998) and Laffont et al. (1998). We then extend the basic framework by introducing an investment stage, prior to price competition, in order to analyse the incentives that operators have to invest in facilities with different levels of quality. We show that the incentives to invest are influenced by the way termination charges are set. In particular, when the quality of a network has an impact on all calls initiated by own customers (destined both on-net and off-net), we obtain a result of "tacit collusion" even in a symmetric model with two-part pricing. Firms tend to underinvest in quality, and this would be exacerbated if they can negotiate reciprocal termination charges above cost.

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Bibliographic Info

Article provided by SIE - Societa' Italiana degli Economisti (I) in its journal Rivista Italiana degli Economisti.

Volume (Year): 8 (2003)
Issue (Month): 2 (August)
Pages: 245-266

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Handle: RePEc:rie:review:v:8:y:2003:i:2:n:4

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