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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"Access Pricing and Competition,"
95-11, Massachusetts Institute of Technology (MIT), Department of Economics.
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- repec:cup:cbooks:9780521591591 is not listed on IDEAS
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- 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.
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99-55, Centre de Recherche en Economie et Statistique.
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- Ingo Vogelsang, 2003. "Price Regulation of Access to Telecommunications Networks," Journal of Economic Literature, American Economic Association, vol. 41(3), pages 830-862, September.
- Economides, N. & Lopomo, G. & Woroch, G., 1996. "Regulatory Rules to Neutralize Network Dominance," Working Papers 96-14, New York University, Leonard N. Stern School of Business, Department of Economics.
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