Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
7354986 | International Journal of Industrial Organization | 2018 | 42 Pages |
Abstract
This paper compares the impacts of traditional one-way access obligations and the new regulatory scheme of co-investment on the roll-out of network infrastructures. We show that compulsory access leads to smaller roll-out, first because it reduces the returns from investment, and second because in the presence of uncertainty it provides access seekers with an option whose exercise hurts investors. Co-investment without access obligations leads to risk sharing and eliminates the access option, implying highest network coverage. Allowing for access on top of co-investment actually decreases welfare if the access price is low.
Related Topics
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Economics and Econometrics
Authors
Marc Bourreau, Carlo Cambini, Steffen Hoernig,