Price squeezes in a regulatory environment
AbstractThis paper analyzes the relevance and the scope of price squeeze tests in a regulatory environment. We distinguish between three types of ex ante regulation (full, partial or no) to identify the following types of price squeezes: regulatory squeezes, predatory squeezes, and squeezes as foreclosure. We argue that policy makers should use price squeeze tests as an ex post instrument, compatible with the ex ante regulatory environment. Our analysis implies that policy makers should focus on predatory price squeezes. We propose a predatory squeeze test that respects previously made regulatory choices, in contrast with the earlier proposed tests. We extend our framework to ask at which aggregation level predatory price squeeze tests ought to be applied, a much-debated issue in telecommunications.
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Bibliographic InfoPaper provided by Katholieke Universiteit Leuven in its series Open Access publications from Katholieke Universiteit Leuven with number urn:hdl:123456789/118284.
Date of creation: 2003
Date of revision:
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Choice; Foreclosure; Framework; Policy; Regulation;
Other versions of this item:
- Bouckaert, Jan & Verboven, Frank, 2003. "Price Squeezes in a Regulatory Environment," CEPR Discussion Papers 3824, C.E.P.R. Discussion Papers.
- Bouckaert Jan & Verboven Frank, 2003. "Price squeezes in a regulatory environment," Working Papers 2003007, University of Antwerp, Faculty of Applied Economics.
- L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
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Open Access publications from University College London
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