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A Further Look at Two-way Network Competition in Telecommunications

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  • Stefan Buehler

    (Socioeconomic Institute, University of Zurich)

Abstract

This paper develops a simple reduced form model of two-way network competition with linear retail pricing. Using the techniques of supermodular games, it is demonstrated that the most important results from the existing literature do not depend on routinely invoked assumptions, such as specific functional forms or the symmetry of the network operators. In particular, it is demonstrated that (i) firms do not need to be symmetric or regulated to have incentives to collude in access pricing, and (ii) due to the effects on social welfare, enforcing colluding firms to behave noncooperatively is not necessarily desirable.

Suggested Citation

  • Stefan Buehler, 1999. "A Further Look at Two-way Network Competition in Telecommunications," SOI - Working Papers 9904, Socioeconomic Institute - University of Zurich, revised Apr 2000.
    • Handle: RePEc:soz:wpaper:9904
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    File URL: https://www.econ.uzh.ch/apps/workingpapers/wp/wp9904.pdf
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    References listed on IDEAS

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    Cited by:

    1. Reto Foellmi & Urs Meister, 2005. "Product-Market Competition in the Water Industry: Voluntary Non-discriminatory Pricing," Journal of Industry, Competition and Trade, Springer, vol. 5(2), pages 115-135, June.

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    More about this item

    Keywords

    interconnection; supermodularity; tacit collusion; telecommunications;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • K23 - Law and Economics - - Regulation and Business Law - - - Regulated Industries and Administrative Law
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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