Endogenous Average Cost Based Access Pricing
We analyze an endogenous average cost based access pricing rule,where both the regulated firm and its rivals realize the interdependence among their output and the regulated access price. In contrast, the existing literature on access pricing has always assumed the access price to be exogenously fixed ex-ante. We show that endogenous access pricing fully neutralizes the dominance enjoyed by the incumbent firm, and that the consumer surplus is equal to or larger than under exogenous access pricing. If the entrants are more efficient than the incumbent, then the welfare under endogenous access pricing is higher than under exogenous access pricing.
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- Jean-Jacques Laffont & Jean Tirole, 1994.
"Access Pricing and Competition,"
94-31, Massachusetts Institute of Technology (MIT), Department of Economics.
- Laffont, Jean-Jacques & Tirole, Jean, 1992. "Access Pricing and Competition," IDEI Working Papers 19, Institut d'Économie Industrielle (IDEI), Toulouse.
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Discussion Paper Series In Economics And Econometrics
9532, Economics Division, School of Social Sciences, University of Southampton.
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- Economides, Nicholas & Lopomo, Giuseppe & Woroch, Glenn, 1996. "Regulatory Pricing Rules to Neutralize Network Dominance," Industrial and Corporate Change, Oxford University Press, vol. 5(4), pages 1013-28.
- Cave, Martin & Vogelsang, Ingo, 0. "How access pricing and entry interact," Telecommunications Policy, Elsevier, vol. 27(10-11), pages 717-727, November.
- Ingo Vogelsang, 2003. "Price Regulation of Access to Telecommunications Networks," Journal of Economic Literature, American Economic Association, vol. 41(3), pages 830-862, September.
- Biglaiser, Gary & DeGraba, Patrick, 2001. "Downstream Integration by a Bottleneck Input Supplier Whose Regulated Wholesale Prices Are Above Costs," RAND Journal of Economics, The RAND Corporation, vol. 32(2), pages 302-15, Summer.
- David E. M Sappington, 2005. "On the Irrelevance of Input Prices for Make-or-Buy Decisions," American Economic Review, American Economic Association, vol. 95(5), pages 1631-1638, December.
- Ã˜ystein Foros & Hans Kind & Lars SÃ¸rgard, 2007. "Managerial incentives and access price regulation," European Journal of Law and Economics, Springer, vol. 23(2), pages 117-133, April.
- Philippe Choné & Laurent Flochel & Anne Perrot, 1999.
"Allocating and Funding Universal Service Obligations in a Competitive Network Market,"
99-55, Centre de Recherche en Economie et Statistique.
- Philippe Chone & Laurent Flochel & Anne Perrot, 2000. "Allocating and Funding Universal Service Obligations in a Competitive Network Market," Econometric Society World Congress 2000 Contributed Papers 0213, Econometric Society.
- Mandy David M. & Sharkey William W., 2003. "Dynamic Pricing and Investment from Static Proxy Models," Review of Network Economics, De Gruyter, vol. 2(4), pages 1-37, December.
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- repec:cup:cbooks:9780521591591 is not listed on IDEAS
- Chone, Philippe & Flochel, Laurent & Perrot, Anne, 2002. "Allocating and funding universal service obligations in a competitive market," International Journal of Industrial Organization, Elsevier, vol. 20(9), pages 1247-1276, November.
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