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Upstream Competition and Open Access Regimes: Experimental Evidence

Author

Listed:
  • Horstmann, Niklas
  • Krämer, Jan
  • Schnurr, Daniel

Abstract

We investigate the effects of alternative open access regimes on market performance. In particular, by means of an economic laboratory experiment we compare the market outcomes under unregulated wholesale competition, under a price-fixing rule (where firms must maintain their wholesale price for a fixed period of time), and under a margin squeeze rule (where the retail price of integrated firms must exceed their wholesale price). Our analysis suggests that wholesale and retail prices are substantially reduced by the introduction of a price-fixing rule at the upstream level compared to the unregulated scenario. In contrast, we do not find evidence that a margin squeeze regulation reduces retail market prices. In fact, while such a rule benefits the reselling firm by allowing for a viable profit margin, prices for consumers tend to be even higher than in the unregulated case.

Suggested Citation

  • Horstmann, Niklas & Krämer, Jan & Schnurr, Daniel, 2015. "Upstream Competition and Open Access Regimes: Experimental Evidence," 26th European Regional ITS Conference, Madrid 2015 127149, International Telecommunications Society (ITS).
  • Handle: RePEc:zbw:itse15:127149
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    References listed on IDEAS

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    More about this item

    Keywords

    Next Generation Access Networks; Access Regulation; Open Access; Upstream Competition; Experimental Economics; Margin Squeeze;
    All these keywords.

    JEL classification:

    • C92 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Group Behavior
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L90 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - General

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