Access Regulation under Asymmetric Information about Demand
We study the impact of access regulation in a telecommunications market on an entrant?s decision whether to invest in a network or ask for access when the regulator cannot observe its potential demand. Since the entrant has incentives to not compete vigorously right after entry in order to convince the regulator that it needs cheap access in the future, the regulator must set access prices which tend to be distorted (lower or higher) as compared to fi?rst best. Still, this is better than committing to ignore ex post demand information. Consulting the entrant earlier about its expectations improves welfare and may help to achieve the ?first best.
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| Length: | 26 pages |
| Date of creation: | Nov 2007 |
| Date of revision: | |
| Handle: | RePEc:pca:wpaper:30 |
| Contact details of provider: | Postal: Phone: (351) 21 790 20 00 Fax: (351) 21 790 20 99 Web page: http://www.autoridadedaconcorrencia.pt/Email: More information through EDIRC
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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.:
- Paula Sarmento, 2003. "Entry Regulation under Asymmetric Information about Demand: A Signalling Model Approach," CEF.UP Working Papers 0304, Universidade do Porto, Faculdade de Economia do Porto.
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- Jean-Jacques Laffont & Jean Tirole, 1994.
"Access Pricing and Competition,"
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94-31, Massachusetts Institute of Technology (MIT), Department of Economics.
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- J-J. Laffont & J. Tirole, 1994. "Access Pricing and Competition," Working papers 95-11, 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.
- Roger B. Myerson, 1977.
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- Myerson, Roger B, 1979. "Incentive Compatibility and the Bargaining Problem," Econometrica, Econometric Society, vol. 47(1), pages 61-73, January.
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33648, Harvard University OpenScholar.
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