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Regulatory Competition in Network Interconnection Pricing

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  • Agrell Per J.

    () (Louvain School of Management and CORE, Université catholique de Louvain)

  • Pouyet Jerome

    (Department of Economics, Ecole Polytechnique France)

Abstract

This paper covers network investment problems under decentralized control of regulation, infrastructure ownership and management. The model features two countries managing domestic infrastructures, used simultaneously for downstream international service provision. Initially, the welfare losses from non-cooperative investment financing policy and access pricing are derived. The impact of strategic interaction between the countries' access prices on the choice of financing policy is investigated. Under strict budget balancing, there are no incentives for efficiency improving investments. Further, investment coordination is shown useless in the absence of regulatory coordination. Illustrations from European network regulation policy for energy and rail are presented.

Suggested Citation

  • Agrell Per J. & Pouyet Jerome, 2008. "Regulatory Competition in Network Interconnection Pricing," Review of Network Economics, De Gruyter, vol. 7(1), pages 1-25, March.
  • Handle: RePEc:bpj:rneart:v:7:y:2008:i:1:n:7
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    Cited by:

    1. M. Ziliotti, 2007. "I prezzi di accesso alle reti di servizi di pubblica utilità: una sintesi teorica," Economics Department Working Papers 2007-EP01, Department of Economics, Parma University (Italy).
    2. Francesc Trillas, 2008. "Regulatory federalism in network industries," Working Papers 2008/8, Institut d'Economia de Barcelona (IEB).
    3. Grahn-Voorneveld, Sofia, 2011. "Sharing profit in parallel and serial transport networks," Working papers in Transport Economics 2011:7, CTS - Centre for Transport Studies Stockholm (KTH and VTI).

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