Strategic Regulation Policy in the Internet
Some countries are importers while others are exporters of global backbone connectivity. At the same time, input components such as local access are non-traded. This paper analyzes a non-cooperative regulatory game between importing and exporting countries, assuming that the prices of both traded and non-traded inputs can be regulated. We show that exporting countries choose a more restrictive regulation of non-traded goods than importing countries do. We further show that a requirement of international non-discrimination may hurt importing countries, and give firms producing traded inputs incentives to invest in quality degradation. Copyright Springer Science+Business Media, LLC 2006
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- James A. Brander, 1995.
"Strategic Trade Policy,"
NBER Working Papers
5020, National Bureau of Economic Research, Inc.
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