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Quantity competition with access fees

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  • Harrison, Mark
  • Kline, J. Jude

Abstract

We analyze an oligopoly model where firms choose both quantities and access fees. Per unit prices are determined endogenously to equate quantity demanded with quantity supplied at each firm. In a Nash equilibrium of the game played by firms, the per unit prices equal mairginal cost and access fees may or may not extract all consumer surplus.
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Suggested Citation

  • Harrison, Mark & Kline, J. Jude, 2001. "Quantity competition with access fees," International Journal of Industrial Organization, Elsevier, vol. 19(3-4), pages 345-373, March.
  • Handle: RePEc:eee:indorg:v:19:y:2001:i:3-4:p:345-373
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    References listed on IDEAS

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    1. William Novshek, 1985. "On the Existence of Cournot Equilibrium," Review of Economic Studies, Oxford University Press, vol. 52(1), pages 85-98.
    2. Kaneko, Mamoru & Yamamoto, Yoshitsugu, 1986. "The existence and computation of competitive equilibria in markets with an indivisible commodity," Journal of Economic Theory, Elsevier, vol. 38(1), pages 118-136, February.
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    5. Scotchmer, Suzanne, 1985. "Profit-maximizing clubs," Journal of Public Economics, Elsevier, vol. 27(1), pages 25-45, June.
    6. Mandy, David M, 1992. "Nonuniform Bertrand Competition," Econometrica, Econometric Society, vol. 60(6), pages 1293-1330, November.
    7. Young, Allan Richard, 1991. "Transaction Cost, Two-Part Tariffs, and Collusion," Economic Inquiry, Western Economic Association International, vol. 29(3), pages 581-590, July.
    8. Suzanne Scotchmer, 1985. "Two-Tier Pricing of Shared Facilities in a Free-Entry Equilibrium," RAND Journal of Economics, The RAND Corporation, vol. 16(4), pages 456-472, Winter.
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    10. Shaffer, Sherrill, 1987. "Two-Part Tariffs in a Contestable Natural Monopoly," Economica, London School of Economics and Political Science, vol. 54(215), pages 315-316, August.
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    Cited by:

    1. Funaki, Y. & Houba, H.E.D. & Motchenkova, E., 2012. "Market Power in Bilateral Oligopoly Markets with Nonexpendable Infrastructure," Discussion Paper 2012-041, Tilburg University, Tilburg Law and Economic Center.
    2. Mark Lijesen & Hein Mannaerts & Machiel Mulder, 2002. "Will California come to Europe? A Numerical Simulation," Journal of Industry, Competition and Trade, Springer, vol. 2(1), pages 173-188, June.
    3. Meagher, Kieron & Teo, Ernie G.S., 2005. "Two-part tariffs in the online gaming industry: The role of creative destruction and network externalities," Information Economics and Policy, Elsevier, vol. 17(4), pages 457-470, October.
    4. Mark Lijesen, 2002. "Welfare effects of vertical integration in energy distribution," CPB Memorandum 43, CPB Netherlands Bureau for Economic Policy Analysis.
    5. Griva, Krina & Vettas, Nikolaos, 2015. "On two-part tariff competition in a homogeneous product duopoly," International Journal of Industrial Organization, Elsevier, vol. 41(C), pages 30-41.
    6. Ji Baek & Jan Brueckner, 2015. "Three-Part Tariffs with Heterogeneous Users: Monopoly and Duopoly Cases," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 47(2), pages 155-165, September.
    7. Laura Onofri, 2005. "Electricity Market Restructuring and Energy Contracts: A Critical Note on the EU Commission’s NEA Decision," European Journal of Law and Economics, Springer, vol. 20(1), pages 71-85, July.

    More about this item

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory

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