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Strategic investment timing under asymmetric access charge regulation in telecommunications

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  • Shibata, Takashi
  • Yamazaki, Hiroshi

Abstract

In a liberalized telecommunications market, an incumbent has several advantages over any entrant. An asymmetric access charge regulation for two such asymmetric firms stimulates competitive investment. We show that an entrant with a cost disadvantage has an incentive to invest as a leader under an asymmetric access charge regulation. These results fit well with the findings of previous empirical work. Moreover, we also investigate the effects of an asymmetric access charge regulation on competitive investment strategies.

Suggested Citation

  • Shibata, Takashi & Yamazaki, Hiroshi, 2010. "Strategic investment timing under asymmetric access charge regulation in telecommunications," European Journal of Operational Research, Elsevier, vol. 207(3), pages 1689-1701, December.
    • Handle: RePEc:eee:ejores:v:207:y:2010:i:3:p:1689-1701
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    3. Trigeorgis, Lenos & Tsekrekos, Andrianos E., 2018. "Real Options in Operations Research: A Review," European Journal of Operational Research, Elsevier, vol. 270(1), pages 1-24.
    4. Luo, Pengfei & Tian, Yuan & Yang, Zhaojun, 2020. "Real option duopolies with quasi-hyperbolic discounting," Journal of Economic Dynamics and Control, Elsevier, vol. 111(C).

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