“A Note on Access Pricing, Role Exchangeability and Incentives to Invest”
AbstractThe traditional Ramsey pricing and the Efficient Component Pricing Rule for access charges to a facility are modified in this paper, taking into account the constraint that profits per unit of investment must be the same between entrants and the incumbent (a general equilibrium requirement). It is shown that the required modifications are applicable even when the sustainability constraint is not operative. If this new condition is not satisfied, the incumbent will have an incentive to postpone the construction of the critical facility.
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Bibliographic InfoPaper provided by Instituto de Economía, Universidad Argentina de la Empresa in its series UADE Working Papers with number 23_2007.
Length: 12 pages
Date of creation: 01 May 2007
Date of revision:
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Web page: http://www.uade.edu.ar/paginas/InstEconomiaIDE.aspx
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Access Pricing; Exchangeability; Incentives to Invest;
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