Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
9550921 | European Economic Review | 2005 | 27 Pages |
Abstract
We show that the incumbent sets too low a rental price for its loops; hence, the entrant adopts the new technology too late from a social welfare perspective. The distortion may appear not only on the timing of technology adoption but also on the type (quality) of the new technology to be adopted. We also show that while regulating the rental price may suffice to achieve socially desirable outcomes, a sunset clause does not improve social welfare.
Related Topics
Social Sciences and Humanities
Economics, Econometrics and Finance
Economics and Econometrics
Authors
Marc Bourreau, Pinar Doǧan,