Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
6950287 | Telecommunications Policy | 2018 | 18 Pages |
Abstract
We examine competition for access provision when symmetric vertically integrated firms invest in infrastructure upgrades. Spillovers through access have two effects (a wholesale-profit effect and a retail-production effect) on infrastructure investment made by vertically integrated firms. When the vertically integrated firms freely set access charges, due to the dominance of the wholesale-profit effect, quality differentials endogenously occur between these firms (asymmetric equilibria). When access charges are regulated, symmetric equilibria occur with multiple equilibrium investments due to the retail-production effect. Because competition for access provision induces a strong incentive for infrastructure investment, it also achieves a higher social welfare than does access regulation.
Keywords
Related Topics
Physical Sciences and Engineering
Computer Science
Information Systems
Authors
Noriaki Matsushima, Keizo Mizuno,