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Competition for access provision: Infrastructure upgrades with spillovers

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  • Matsushima, Noriaki
  • Mizuno, Keizo

Abstract

We examine a game of competition with access provision in which service quality is endogenously determined through infrastructure upgrades with spillovers. There are two types of equilibria in the free competition regime. In particular, voluntary access provision with an access charge higher than access cost occurs in equilibrium, irrespective of the degree of spillover and the investment cost. However, foreclosure also occurs in equilibrium when the degree of spillover is small and the investment cost is low. We also show that, when voluntary access provision occurs in equilibrium, access regulation is socially desirable only if the degree of spillover is small and the investment cost is high. On the contrary, access regulation is socially desirable in the broader range of investment cost under foreclosure than under voluntary access provision.

Suggested Citation

  • Matsushima, Noriaki & Mizuno, Keizo, 2014. "Competition for access provision: Infrastructure upgrades with spillovers," 25th European Regional ITS Conference, Brussels 2014 101419, International Telecommunications Society (ITS).
    • Handle: RePEc:zbw:itse14:101419
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    References listed on IDEAS

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    Cited by:

    1. Horstmann, Niklas & Krämer, Jan & Schnurr, Daniel, 2015. "Upstream Competition and Open Access Regimes: Experimental Evidence," 26th European Regional ITS Conference, Madrid 2015 127149, International Telecommunications Society (ITS).

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    More about this item

    Keywords

    access provision; infrastructure upgrades; foreclosure;
    All these keywords.

    JEL classification:

    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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