Comparison of investment regimes with cost-based access pricing rules
This paper examines a network owner's incentive for access innovation (i.e., the reduction of access cost) and compares two investment regimes (cooperation and noncooperation) under cost-based access pricing rules. When the access pricing rule is based on access cost, it brings about a spillover effect. It is then shown that when the spillover effect is large (small), a cooperative investment regime achieves a lower (higher) access cost than a noncooperative investment regime. In addition, when a regulator adopts an incremental access cost rule that requires the access charge to equal the access cost, a cooperative investment regime achieves greater social welfare than a noncooperative investment regime.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ding Lu, 2001. "Shared network investment," Journal of Economics, Springer, vol. 73(3), pages 299-312, October.
- Ingo Vogelsang, 2003. "Price Regulation of Access to Telecommunications Networks," Journal of Economic Literature, American Economic Association, vol. 41(3), pages 830-862, September.
- Guthrie, Graeme, 2006. "Regulating Infrastructure: The Impact on Risk and Investment," Working Paper Series 3851, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
- Graeme Guthrie, 2006. "Regulating Infrastructure: The Impact on Risk and Investment," Journal of Economic Literature, American Economic Association, vol. 44(4), pages 925-972, December.
- Øystein Foros & Bjørn Hansen & Jan Sand, 2002. "Demand-side Spillovers and Semi-collusion in the Mobile Communications Market," Journal of Industry, Competition and Trade, Springer, vol. 2(3), pages 259-278, September.
- Valletti, Tommaso M., 0. "The theory of access pricing and its linkage with investment incentives," Telecommunications Policy, Elsevier, vol. 27(10-11), pages 659-675, November.
- Foros, Oystein, 2004. "Strategic investments with spillovers, vertical integration and foreclosure in the broadband access market," International Journal of Industrial Organization, Elsevier, vol. 22(1), pages 1-24, January.
When requesting a correction, please mention this item's handle: RePEc:eee:japwor:v:21:y:2009:i:3:p:248-255. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.