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 InfoPaper provided by School of Economics, Kwansei Gakuin University in its series Discussion Paper Series with number 28.
Length: 24 pages
Date of creation: Jan 2006
Date of revision: Jan 2006
Publication status: Published in Journal of Economics, 2006, vol. 88, issue 3, pages 243-261
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Network infrastructure; Coalition; Access Charge; Delegation;
Other versions of this item:
- Keizo Mizuno & Tetsuya Shinkai, 2006. "Delegating Infrastructure Projects with Open Access," Journal of Economics, Springer, vol. 88(3), pages 243-261, 09.
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-03-31 (All new papers)
- NEP-BEC-2007-03-31 (Business Economics)
- NEP-COM-2007-03-31 (Industrial Competition)
- NEP-MIC-2007-03-31 (Microeconomics)
- NEP-NET-2007-03-31 (Network Economics)
- NEP-PPM-2007-03-31 (Project, Program & Portfolio Management)
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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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