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Corporate Self-Regulation vs. Ex-Ante Regulation of Network Access: A Model of the German Gas Sector

Author

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  • Georg Meran
  • Christian von Hirschhausen

Abstract

This paper compares the outcomes of corporate self-regulation and traditional ex-ante regulation of network access to monopolistic bottlenecks. In the model of self-regulation, the domestic gas supplier and network owner and the monopsonistic gas customer fix quantities and the network access price, whereas the competitive fringe of foreign gas producers (third party) and the household customers are excluded from the agreement. The results are then compared with the outcome of traditional ex-ante regulation. We find that while industrial self-regulation leads to an exploitation of households, the effect on the foreign producers is unclear.

Suggested Citation

  • Georg Meran & Christian von Hirschhausen, 2004. "Corporate Self-Regulation vs. Ex-Ante Regulation of Network Access: A Model of the German Gas Sector," Discussion Papers of DIW Berlin 436, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp436
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    File URL: http://www.diw.de/documents/publikationen/73/diw_01.c.42346.de/dp436.pdf
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    References listed on IDEAS

    as
    1. Cremer, Helmuth & Gasmi, Farid & Laffont, Jean-Jacques, 2003. "Access to Pipelines in Competitive Gas Markets," Journal of Regulatory Economics, Springer, vol. 24(1), pages 5-33, July.
    2. Brunekreeft, G., 2002. "Regulatory Threat in Vertically Related Markets; The Case of German Electricity," Cambridge Working Papers in Economics 0228, Faculty of Economics, University of Cambridge.
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    Cited by:

    1. Thomas Wein, 2005. "Associations` Agreement and the Interest of the Network Suppliers - The Strategic Use of Structural Features," Working Paper Series in Economics 7, University of Lüneburg, Institute of Economics.
    2. Christian Growitsch & Thomas Wein, 2005. "Negotiated Third Party Access—An Industrial Organisation Perspective," European Journal of Law and Economics, Springer, vol. 20(2), pages 165-183, September.
    3. Thomas Wein & Heike Wetzel, 2007. "The Difficulty to Behave as a (regulated) Natural Monopolist – The Dynamics of Electricity Network Access Charges in Germany 2002 to 2005," Working Paper Series in Economics 62, University of Lüneburg, Institute of Economics.
    4. Diekmann, Jochen & Leprich, Uwe & Ziesing, Hans-Joachim, 2007. "Regulierung der Stromnetze in Deutschland: Ökonomische Anreize für Effizienz und Qualität einer zukunftsfähigen Netzinfrastruktur," Study / edition der Hans-Böckler-Stiftung, Hans-Böckler-Stiftung, Düsseldorf, volume 127, number 187.

    More about this item

    Keywords

    Ex-ante regulation; Competition policy; Non-discriminatory network access; Bargaining;

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L95 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Gas Utilities; Pipelines; Water Utilities

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