This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Deregulating Network Industries: Dealing with Price-Quality Tradeoffs

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Stefan Buehler () (Socioeconomic Institute, University of Zurich)
Dennis Gaertner () (Socioeconomic Institute, University of Zurich)
Daniel Halbheer () (Socioeconomic Institute, University of Zurich)

Additional information is available for the following registered author(s):

Abstract

This paper examines the e®ects of introducing competition into monopolized network industries on prices and infrastructure quality. Analyzing a model with reduced-form demand, we ¯rst show that deregulating an integrated monopoly cannot simultaneously decrease the retail price and increase infrastructure quality. Second, we derive conditions under which reducing both retail price and infrastructure quality relative to the integrated monopoly outcome increases welfare. Third, we argue that restructuring and setting very low access charges may yield welfare losses, as infrastructure investment is undermined. We provide an extensive analysis of the linear demand model and discuss policy implications.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www.soi.uzh.ch/research/wp/2004/wp0402.pdf
File Format: application/pdf
File Function: Revised version, 2005
Download Restriction: no

Publisher Info
Paper provided by University of Zurich, Socioeconomic Institute in its series Working Papers with number 0402.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 27 pages
Date of creation: Jan 2004
Date of revision: Oct 2005
Publication status: Published in Journal of Regulatory Economics 30(1), 99-115, 2006
Handle: RePEc:soz:wpaper:0402

Contact details of provider:
Postal: Bl�mlisalpstrasse 10, CH-8006 Z�rich
Phone: +41-1-634 22 05
Fax: +41-1-634 49 07
Email:
Web page: http://www.soi.uzh.ch/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Harry Telser).

Related research
Keywords: infrastructure quality; deregulation; investment incentives; access charges; regulation;

Other versions of this item:

Find related papers by JEL classification:
D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation

This paper has been announced in the following NEP Reports:

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.:
  1. Economides, Nicholas, 1998. "The incentive for non-price discrimination by an input monopolist," International Journal of Industrial Organization, Elsevier, vol. 16(3), pages 271-284, May. [Downloadable!] (restricted)
  2. Spence, A Michael, 1977. "Nonprice Competition," American Economic Review, American Economic Association, vol. 67(1), pages 255-59, February.
  3. Newbery, D., 1996. "Privatisation and Liberalisation of Network Utilities," Cambridge Working Papers in Economics 9620, Faculty of Economics, University of Cambridge.
    Other versions:
  4. Buehler, Stefan & Schmutzler, Armin & Benz, Men-Andri, 2004. "Infrastructure quality in deregulated industries: is there an underinvestment problem?," International Journal of Industrial Organization, Elsevier, vol. 22(2), pages 253-267, February. [Downloadable!] (restricted)
    Other versions:
  5. Reiffen, David, 1998. "A Regulated Firm's Incentive to Discriminate: A Reevaluation and Extension of Weisman's Result," Journal of Regulatory Economics, Springer, vol. 14(1), pages 79-86, July. [Downloadable!] (restricted)
  6. A. Michael Spence, 1975. "Monopoly, Quality, and Regulation," Bell Journal of Economics, The RAND Corporation, vol. 6(2), pages 417-429, Autumn. [Downloadable!] (restricted)
Full references

Cited by:
(explanations, 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.)

  1. Anette Boom & Stefan Buehler, 2007. "Restructuring Electricity Markets when Demand is Uncertain: Effects on Capacity Investments, Prices and Welfare," CIE Discussion Papers 2007-09, University of Copenhagen. Department of Economics. Centre for Industrial Economics. [Downloadable!]
Statistics
Access and download statistics

Did you know? The RePEc project started in 1997. Its precursor, NetEc, dates back to 1993.

This page was last updated on 2009-11-4.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.