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Cooperative investment, access, and uncertainty

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Listed:
  • Bourreau, Marc
  • Cambini, Carlo
  • Hoernig, Steffen

Abstract

This paper compares the impacts of traditional one-way access obligations and the new regulatory scheme of co-investment on the roll-out of network infrastructures. We show that compulsory access leads to smaller roll-out, first because it reduces the returns from investment, and second because in the presence of uncertainty it provides access seekers with an option whose exercise hurts investors. Co-investment without access obligations leads to risk sharing and eliminates the access option, implying highest network coverage. Allowing for access on top of co-investment actually decreases welfare if the access price is low.

Suggested Citation

  • Bourreau, Marc & Cambini, Carlo & Hoernig, Steffen, 2018. "Cooperative investment, access, and uncertainty," International Journal of Industrial Organization, Elsevier, vol. 56(C), pages 78-106.
  • Handle: RePEc:eee:indorg:v:56:y:2018:i:c:p:78-106
    DOI: 10.1016/j.ijindorg.2017.11.004
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    References listed on IDEAS

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    More about this item

    Keywords

    Co-investment; Access obligations; Next generation networks; Uncertainty;

    JEL classification:

    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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