IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Competition and regulation in a differentiated good market

  • Raffaele Fiocco

This paper addresses the issue of how to design the institutional structure of an industry which provides two differentiated products. One good is supplied by a regulated monopoly and the other is produced in a competitive (unregulated) segment. Two possible institutional patterns are compared. Under "concentration" the regulated firm can enter the competitive segment by owning one firm which operates there (even though the two firms must be legally unbundled). Theregime of "separation" implies that regulated activities are totally unbundled from the unregulated ones, that is, common ownership is not allowed. When the regulator does not know the regulated monopoly's cost of production, we find that the pattern of separation improves (expected) social welfare as long as goods are substitutes. Conversely, concentration performs better in case of complementarity.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://sfb649.wiwi.hu-berlin.de/papers/pdf/SFB649DP2011-084.pdf
Download Restriction: no

Paper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2011-084.

as
in new window

Length: 40 pages
Date of creation: Nov 2011
Date of revision:
Handle: RePEc:hum:wpaper:sfb649dp2011-084
Contact details of provider: Postal: Spandauer Str. 1,10178 Berlin
Phone: +49-30-2093-5708
Fax: +49-30-2093-5617
Web page: http://sfb649.wiwi.hu-berlin.deEmail:


More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Laffont, Jean-Jacques & Tirole, Jean, 1986. "Using Cost Observation to Regulate Firms," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 614-41, June.
  2. Rong Liu & Lijian Yang & Wolfgang K. Härdle, 2013. "Oracally Efficient Two-Step Estimation of Generalized Additive Model," Journal of the American Statistical Association, Taylor & Francis Journals, vol. 108(502), pages 619-631, June.
  3. Shuzhuan Zheng & Lijian Yang & Wolfgang Karl Härdle, 2011. "A Confidence Corridor for Sparse Longitudinal Data Curves," SFB 649 Discussion Papers SFB649DP2011-002, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  4. Till Strohsal & Enzo Weber, 2014. "Mean-variance cointegration and the expectations hypothesis," Quantitative Finance, Taylor & Francis Journals, vol. 14(11), pages 1983-1997, November.
  5. Rodrigo Herrera & Bernhard Schipp, 2011. "Extreme value models in a conditional duration intensity framework," SFB 649 Discussion Papers SFB649DP2011-022, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  6. David Sappington, 2006. "On the Merits of Vertical Divestiture," Review of Industrial Organization, Springer, vol. 29(3), pages 171-191, November.
  7. Nikolaus Hautsch & Ruihong Huang, 2011. "Limit Order Flow, Market Impact and Optimal Order Sizes: Evidence from NASDAQ TotalView-ITCH Data," SFB 649 Discussion Papers SFB649DP2011-056, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  8. Xiaoliang Liu & Wei Xu & Martin Odening, 2011. "Can crop yield risk be globally diversified?," SFB 649 Discussion Papers SFB649DP2011-018, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  9. Axel Groß‐KlußMann & Nikolaus Hautsch, 2013. "Predicting Bid–Ask Spreads Using Long‐Memory Autoregressive Conditional Poisson Models," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 32(8), pages 724-742, December.
  10. Nirvikar Singh & Xavier Vives, 1984. "Price and Quantity Competition in a Differentiated Duopoly," RAND Journal of Economics, The RAND Corporation, vol. 15(4), pages 546-554, Winter.
  11. Ingo Vogelsang, 2003. "Price Regulation of Access to Telecommunications Networks," Journal of Economic Literature, American Economic Association, vol. 41(3), pages 830-862, September.
  12. Esra Akdeniz Duran & Wolfgang Karl Härdle & Maria Osipenko, 2011. "Difference based Ridge and Liu type Estimators in Semiparametric Regression Models," SFB 649 Discussion Papers SFB649DP2011-014, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  13. Nikolaus Hautsch & Julia Schaumburg & Melanie Schienle, 2012. "Financial Network Systemic Risk Contributions," SFB 649 Discussion Papers SFB649DP2012-053, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  14. Mechtenberg, Lydia & Münster, Johannes, 2012. "A strategic mediator who is biased in the same direction as the expert can improve information transmission," Economics Letters, Elsevier, vol. 117(2), pages 490-492.
  15. Michael C. Burda & Jennifer Hunt, 2011. "What Explains the German Labor Market Miracle in the Great Recession?," NBER Working Papers 17187, National Bureau of Economic Research, Inc.
  16. Martimort, David & Pouyet, Jerome, 2008. "To build or not to build: Normative and positive theories of public-private partnerships," International Journal of Industrial Organization, Elsevier, vol. 26(2), pages 393-411, March.
  17. Sappington, David E. M., 2003. "Regulating horizontal diversification," International Journal of Industrial Organization, Elsevier, vol. 21(3), pages 291-315, March.
  18. Felix Naujokat & Ulrich Horst, 2011. "When to Cross the Spread: Curve Following with Singular Control," SFB 649 Discussion Papers SFB649DP2011-053, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  19. Nikolaus Hautsch & Lada M. Kyj & Peter Malec, 2011. "The Merit of High-Frequency Data in Portfolio Allocation," SFB 649 Discussion Papers SFB649DP2011-059, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  20. Riordan, Michael H & Sappington, David E M, 1987. "Information, Incentives, and Organizational Mode," The Quarterly Journal of Economics, MIT Press, vol. 102(2), pages 243-63, May.
  21. Wolfgang Karl Härdle & Maria Osipenko, 2011. "Spatial Risk Premium on Weather Derivatives and Hedging Weather Exposure in Electricity," SFB 649 Discussion Papers SFB649DP2011-013, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  22. Mammen, Enno & Rothe, Christoph & Schienle, Melanie, 2011. "Semiparametric Estimation with Generated Covariates," IZA Discussion Papers 6084, Institute for the Study of Labor (IZA).
  23. Beresford, Alastair R. & Kübler, Dorothea & Preibusch, Sören, 2010. "Unwillingness to pay for privacy: A field experiment," Discussion Papers, Research Unit: Market Behavior SP II 2010-03, Social Science Research Center Berlin (WZB).
  24. Weining Wang & Ihtiyor Bobojonov & Wolfgang Karl Härdle & Martin Odening, 2011. "Increasing Weather Risk: Fact or Fiction?," SFB 649 Discussion Papers SFB649DP2011-077, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  25. Wolfgang Karl Härdle & Vladimir Spokoiny & Weining Wang, 2011. "Local Quantile Regression," SFB 649 Discussion Papers SFB649DP2011-005, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  26. Alexander Meyer-Gohde, 2011. "Sticky Information and Determinacy," SFB 649 Discussion Papers SFB649DP2011-006, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  27. Baron, David P & Besanko, David, 1992. "Information, Control, and Organizational Structure," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 1(2), pages 237-75, Summer.
  28. Dixit, Avinash K, 1986. "Comparative Statics for Oligopoly," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 107-22, February.
  29. Kartik Anand & Prasanna Gai & Matteo Marsili, 2011. "Rollover risk, network structure and systemic financial crises," SFB 649 Discussion Papers SFB649DP2011-052, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  30. Heinemann, Frank & Llorente-Saguer, Aniol & Fehr, Dietmar, 2011. "The Power of Sunspots: An Experimental Analysis," Annual Conference 2011 (Frankfurt, Main): The Order of the World Economy - Lessons from the Crisis 48724, Verein für Socialpolitik / German Economic Association.
  31. repec:cup:cbooks:9780521591591 is not listed on IDEAS
  32. Kartik Anand & Prasanna Gai & Sujit Kapadia & Simon Brennan & Matthew Willison, 2011. "A Network Model of Financial System Resilience," SFB 649 Discussion Papers SFB649DP2011-051, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  33. Felix Höffler & Sebastian Kranz, 2011. "Imperfect legal unbundling of monopolistic bottlenecks," Journal of Regulatory Economics, Springer, vol. 39(3), pages 273-292, June.
  34. Fahad Khalil & Doyoung Kim & Dongsoo Shin, 2006. "Optimal Task Design: to integrate or separate planning and implementation?," Working Papers UWEC-2003-01-P, University of Washington, Department of Economics.
  35. bauwens, Luc & hafner, Christian & pierret, Diane, 2011. "Multivariate volatility modeling of electricity futures," CORE Discussion Papers 2011011, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  36. Lu Lin & Feng Li & Lixing Zhu & Wolfgang Karl Härdle, 2011. "Mean Volatility Regressions," SFB 649 Discussion Papers SFB649DP2011-003, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  37. Stephan Stahlschmidt & Helmut Tausendteufel & Wolfgang K. Härdle, 2011. "Bayesian Networks and Sex-related Homicides," SFB 649 Discussion Papers SFB649DP2011-045, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  38. Alexander Meyer-Gohde, 2011. "Monetary Policy, Determinacy, and the Natural Rate Hypothesis," SFB 649 Discussion Papers SFB649DP2011-049, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  39. Wolfgang Karl Härdle & Brenda López Cabrera & Ostap Okhrin & Weining Wang, 2011. "Localising temperature risk," SFB 649 Discussion Papers SFB649DP2011-001, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  40. Sigbert Klinke, 2011. "Developing web-based tools for the teaching of statistics: Our Wikis and the German Wikipedia," SFB 649 Discussion Papers SFB649DP2011-030, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  41. Elmar Diederichs & Anatoli Juditsky & Arkadi Nemirovski & Vladimir Spokoiny, 2011. "Sparse Non Gaussian Component Analysis by Semidefinite Programming," SFB 649 Discussion Papers SFB649DP2011-080, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  42. Raffaele Fiocco & Mario Gilli, 2011. "Bargaining and Collusion in a Regulatory Model," Working Papers 207, University of Milano-Bicocca, Department of Economics, revised Mar 2011.
  43. Juliane Scheffel, 2011. "How do Unusual Working Schedules Affect Social Life?," SFB 649 Discussion Papers SFB649DP2011-025, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  44. Sibley, David S. & Weisman, Dennis L., 1998. "Raising rivals' costs: The entry of an upstream monopolist into downstream markets," Information Economics and Policy, Elsevier, vol. 10(4), pages 451-470, December.
  45. BOCART, Fabian Y. R. P. & HAFNER, Christian, 2011. "Econometric analysis of volatile art markets," CORE Discussion Papers 2011052, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  46. Iossa, Elisabetta, 1999. "Informative Externalities and Pricing in Regulated Multiproduct Industries," Journal of Industrial Economics, Wiley Blackwell, vol. 47(2), pages 195-219, June.
  47. Richard J. Gilbert & Michael H. Riordan, 1995. "Regulating Complementary Products: A Comparative Institutional Analysis," RAND Journal of Economics, The RAND Corporation, vol. 26(2), pages 243-256, Summer.
  48. Esra Akdeniz Duran & Mengmeng Guo & Wolfgang Karl Härdle, 2011. "A Confidence Corridor for Expectile Functions," SFB 649 Discussion Papers SFB649DP2011-004, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  49. Raffaele Fiocco & Carlo Scarpa, 2011. "The Regulation of Interdependent Markets," SFB 649 Discussion Papers SFB649DP2011-046, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  50. Dana Jr. James D., 1993. "The Organization and Scope of Agents: Regulating Multiproduct Industries," Journal of Economic Theory, Elsevier, vol. 59(2), pages 288-310, April.
  51. Roger B. Myerson, 1977. "Incentive Compatability and the Bargaining Problem," Discussion Papers 284, Northwestern University, Center for Mathematical Studies in Economics and Management Science.
  52. Ronald R. Braeutigam & John C. Panzar, 1989. "Diversification Incentives under "Price-Based" and "Cost-Based" Regulation," RAND Journal of Economics, The RAND Corporation, vol. 20(3), pages 373-391, Autumn.
  53. Heike Belitz & Marius Clemens & Christian von Hirschhausen & Jens Schmidt-Ehmcke & Axel Werwatz & Petra Zloczysti, 2011. "An Indicator for National Systems of Innovation: Methodology and Application to 17 Industrialized Countries," Discussion Papers of DIW Berlin 1129, DIW Berlin, German Institute for Economic Research.
  54. Höffler, Felix & Kranz, Sebastian, 2011. "Legal unbundling can be a golden mean between vertical integration and ownership separation," International Journal of Industrial Organization, Elsevier, vol. 29(5), pages 576-588, September.
  55. Dorothee Schneider, 2011. "Monitoring, Information Technology and the Labor Share," SFB 649 Discussion Papers SFB649DP2011-066, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  56. Vickers, John, 1995. "Competition and Regulation in Vertically Related Markets," Review of Economic Studies, Wiley Blackwell, vol. 62(1), pages 1-17, January.
  57. Anton, James J. & Gertler, Paul J., 1988. "External markets and regulation," Journal of Public Economics, Elsevier, vol. 37(2), pages 243-260, November.
  58. Cremer, Helmuth & Crémer, Jacques & De Donder, Philippe, 2006. "Legal vs Ownership Unbundling in Network Industries," CEPR Discussion Papers 5767, C.E.P.R. Discussion Papers.
  59. Gunda-Alexandra Detmers & Dieter Nautz, 2011. "The information content of central bank interest rate projections: Evidence from New Zealand," SFB 649 Discussion Papers SFB649DP2011-032, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  60. Dorothee Schneider, 2011. "The Labor Share: A Review of Theory and Evidence," SFB 649 Discussion Papers SFB649DP2011-069, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  61. Lewis, Tracy R. & Sappington, David E. M., 1989. "Countervailing incentives in agency problems," Journal of Economic Theory, Elsevier, vol. 49(2), pages 294-313, December.
  62. BAUWENS, Luc & HAFNER, Christian & LAURENT, Sébastien, 2011. "Volatility models," CORE Discussion Papers 2011058, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  63. repec:cup:cbooks:9780521658713 is not listed on IDEAS
  64. Giacomo Calzolari & Carlo Scarpa, 2009. "Footloose Monopolies: Regulating a "National Champion"," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(4), pages 1179-1214, December.
  65. Lewis, Tracy R & Sappington, David E M, 1989. "An Informational Effect When Regulated Firms Enter Unregulated Markets," Journal of Regulatory Economics, Springer, vol. 1(1), pages 35-45, March.
  66. Dirk Hofmann & Salmai Qari, 2011. "The Law of Attraction: Bilateral Search and Horizontal Heterogeneity," SFB 649 Discussion Papers SFB649DP2011-017, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
  67. Juliane Scheffel, 2011. "Identifying the Effect of Temporal Work Flexibility on Parental Time with Children," SFB 649 Discussion Papers SFB649DP2011-024, Sonderforschungsbereich 649, Humboldt University, Berlin, Germany.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:hum:wpaper:sfb649dp2011-084. 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: (RDC-Team)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.