Access pricing: A comparison between full deregulation and two alternative instruments of access price regulation, cost-based and retail-minus
In this paper, two instruments of access price regulation, cost-based and retail-minus, are compared with the full deregulation hypothesis. For this purpose, a model that considers an upstream monopolist firm that sells a vital input to an independent firm and to a subsidiary firm in the downstream market is developed. The main conclusion of the paper is that retail-minus regulation avoids foreclosure and leads to better results than cost-based regulation in terms of investment level and consumer surplus. Moreover, retail-minus regulation allows a higher consumer surplus than deregulation of access price as long as the regulator carefully defines the retail-minus instrument.
Volume (Year): 31 (2007)
Issue (Month): 5 (June)
|Contact details of provider:|| Web page: http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/description#description|
|Order Information:|| Postal: http://www.elsevier.com/wps/find/journaldescription.cws_home/30471/bibliographic|
When requesting a correction, please mention this item's handle: RePEc:eee:telpol:v:31:y:2007:i:5:p:236-250. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.