The Inefficiency of the ECPR Yet Again: A Reply to Larson
AbstractWe extend the results of our article, "Access and Interconnection Pricing? How Efficient Is the "Efficient Component Pricing Rule?," Antitrust Bulletin (1995). In the presence of a monopolized essential input, we show that application of the Efficient Component Pricing Rule ("ECPR") in pricing this input to downstream competitors perpetuates monopoly distortions and high prices of final goods services. We show these results for various demand conditions, including conditions that are accepted to hold in the telecommunications sector. We also respond to various criticisms raised by A. Larson in "The Efficiency of the Efficient-Component-Pricing Rule: A Comment," Antitrust Bulletin, (this issue) (1997).
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Bibliographic InfoPaper provided by EconWPA in its series Industrial Organization with number 9703001.
Length: 19 pages
Date of creation: 04 Mar 1997
Date of revision:
Note: Type of Document - PDF/PostScript; prepared on IBM PC; to print on HP; pages: 19; figures: included. Forthcoming, Antitrust Bulletin, (1997)
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- White, L.J. & Economides, N., 1996. "The inefficiency of the ECPR Yet Again: A Reply to Larson," Working Papers 96-07, New York University, Leonard N. Stern School of Business, Department of Economics.
- L - Industrial Organization
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