Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
5078710 | International Journal of Industrial Organization | 2006 | 8 Pages |
Abstract
We consider a model with a vertically integrated monopolist network provider who faces rival operators in the retail market. We examine the network operator's incentives for infrastructure investment. We find that investments are below the social optimum even when there is no regulation, and access price regulation further reduces investment incentives. We show that the underinvestment problem may have negative effects on the viability of competition. Access price regulation does not necessarily reduce the likelihood of foreclosure, and in the presence of regulation, rivals are most likely to be foreclosed when they would bring highest benefits to consumers.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Kaisa Kotakorpi,