Access Price Cap Mechanisms and Industry Structure with Information Acquisition
This paper tackles the issue of the welfare desirability of downstream integration versus separation when facing the problem of socially valuable information acquisition on the upstream cost in regulated network industries. I consider an upstream natural monopoly with cost uncertainty, regulated through an access price cap mechanism, and a downstream unregulated Cournot competition. Cost information improves the performance of the regulatory mechanism but it can only be acquired by the monopolist; the information acquisition is unobservable. I show that the access price cap mechanism provides a vertically integrated firm with greater incentives to acquire information and this favours integration.
To our knowledge, this item is not available for
download. To find whether it is available, there are three
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Volume (Year): (2009)
Issue (Month): 1 (January-March)
|Contact details of provider:|| |
When requesting a correction, please mention this item's handle: RePEc:rpo:ripoec:y:2009:i:1:p:209-247. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sabrina Marino)
If references are entirely missing, you can add them using this form.