This paper questions whether competition can replace sector-specific regulation of mobile telecommunications. We show that the monopolistic outcome prevails independently of market concentration when access prices are determined in bilateral negotiations. A light-handed regulatory policy can induce effective competition. Call prices are close to the marginal cost if the networks are sufficiently close substitutes. Neither demand nor cost information is required. A unique and symmetric call price equilibrium exists under symmetric access prices, provided that call demand is sufficiently inelastic. Existence encompasses the case of many networks and high network substitutability.
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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number
6073.
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.:
Björnerstedt, Jonas & Stennek, Johan, 2001.
"Bilateral Oligopoly,"
CEPR Discussion Papers
2864, C.E.P.R. Discussion Papers.
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Other versions:
Jonas Björnerstedt & Johan Stennek, 2001.
"Bilateral Oligopoly,"
CIG Working Papers
FS IV 01-08, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
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