IDEAS home Printed from https://ideas.repec.org/a/bpj/rneart/v6y2007i3n4.html
   My bibliography  Save this article

Efficiency Trade-Offs in the Design of Competition Policy for the Telecommunications Industry

Author

Listed:
  • Gayle Philip G.

    () (Department of Economics, Kansas State University, Manhattan)

  • Weisman Dennis L.

    (Department of Economics, Kansas State University, Manhattan)

Abstract

Trade-offs between imitation and innovation create natural tensions in the design of competition policy for the telecommunications industry. We explore the relationship between the prices of unbundled network elements (UNEs) and static/dynamic efficiency. We find that even when UNEs are priced to induce efficient make-or-buy decisions from a static perspective, mandatory unbundling reduces the incumbent's incentive to invest from a dynamic perspective. Moreover, while the literature focuses on disincentives for investment in innovation associated with low UNE prices, we find that raising prices for UNEs, when such prices preserve the efficient make-or-buy decision, can discourage investment in process innovation.

Suggested Citation

  • Gayle Philip G. & Weisman Dennis L., 2007. "Efficiency Trade-Offs in the Design of Competition Policy for the Telecommunications Industry," Review of Network Economics, De Gruyter, vol. 6(3), pages 1-21, September.
  • Handle: RePEc:bpj:rneart:v:6:y:2007:i:3:n:4
    as

    Download full text from publisher

    File URL: https://www.degruyter.com/view/j/rne.2007.6.3/rne.2007.6.3.1123/rne.2007.6.3.1123.xml?format=INT
    Download Restriction: For access to full text, subscription to the journal or payment for the individual article is required.

    As the access to this document is restricted, you may want to search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Markos Tselekounis & Dimitris Varoutas & Drakoulis Martakos, 2012. "On the social optimality of make-or-buy decisions," Journal of Regulatory Economics, Springer, vol. 41(2), pages 238-268, April.
    2. Carlo Cambini and Virginia Silvestri, 2012. "Technology Investment and Alternative Regulatory Regimes with Demand Uncertainty," RSCAS Working Papers 2012/15, European University Institute.
    3. Martyn Taylor, 2010. "Access Regulation versus Infrastructure Investment: Important Lessons from Australia," Chapters,in: Regulation and the Evolution of the Global Telecommunications Industry, chapter 3 Edward Elgar Publishing.
    4. Krancke, Jan & Vidal, Miguel & Fier, Andreas, 2012. "Changing the rules: Applying a more economic approach to dynamic telecom markets," 23rd European Regional ITS Conference, Vienna 2012 66976, International Telecommunications Society (ITS).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bpj:rneart:v:6:y:2007:i:3:n:4. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Peter Golla). General contact details of provider: https://www.degruyter.com .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.