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

Access and Interconnection Pricing: How Efficient is the Efficient Component Pricing Rule?

  • Nicholas Economides

    (Stern School of Business, New York University)

  • Lawrence J. White

    (Stern School of Business, New York University)

This paper critiques some of the properties of the so-called "efficient component pricing rule" (ECPR) for access to a bottleneck (monopoly) facility. When an entrant/rival and the bottleneck monopolist both produce a complementary component to the bottleneck service, the ECPR specifies that the access fee paid by the rival to the monopolist should be equal to the monopolist's opportunity costs of providing access, including any forgone revenues from a concomitant reduction in the monopolist's sales of the complementary component. We focus especially on the case in which the monopolist's price for the complementary component is above all relevant marginal costs. In this case the ECPR's exclusion of rivals may be socially harmful, since it may be preventing a substantial decrease in the price of the complementary component.

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://econwpa.repec.org/eps/io/papers/9701/9701003.pdf
Download Restriction: no

File URL: http://econwpa.repec.org/eps/io/papers/9701/9701003.ps.gz
Download Restriction: no

Paper provided by EconWPA in its series Industrial Organization with number 9701003.

as
in new window

Length: 23 pages
Date of creation: 27 Jan 1997
Date of revision:
Handle: RePEc:wpa:wuwpio:9701003
Note: Type of Document - PDF/PostScript; prepared on IBM PC; to print on HP; pages: 23; figures: included. published in The Antitrust Bulletin, vol. XL, no. 3, pp. 557-579.
Contact details of provider: Web page: http://econwpa.repec.org

No references listed on IDEAS
You can help add them by filling out this form.

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:wpa:wuwpio:9701003. 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: (EconWPA)

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.