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Ownership Separation of the Gas Transportation Network: Theory and Practice

Susanna Dorigoni

Bocconi University, Milan

Federico Pontoni

Bocconi University

January 3, 2008

This article analyzes the pros and cons of ownership separation of the gas transportation network. This analysis is made with a specific test that confronts two pairs of different theoretical approaches on vertical integration. The result of this test shows that no uncontroversial solution can be offered to this problem, since all arguments (be them in favour or against) can be comfortably contrasted by a counterargument. In our view, an effective regulation would solve the problem, even though it has to be highlighted that ownership separation of the gas transportation network is not the key aspect of the gas industry. EU directives, in fact, cannot be applied where the biggest part of the value chain is produced, that is to say beyond the European borders, where an oligopoly operates. Due to its bargaining power, this oligopoly captures almost all the scarcity rent, reducing the scope for market liberalization.

Number of Pages in PDF File: 28

Keywords: Natural Monopoly, Ownership separation, Vertical foreclosures, Countervailing powers

JEL Classification: L95, L51

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Date posted: April 6, 2008  

Suggested Citation

Dorigoni, Susanna and Pontoni, Federico, Ownership Separation of the Gas Transportation Network: Theory and Practice (January 3, 2008). Available at SSRN: http://ssrn.com/abstract=1116550 or http://dx.doi.org/10.2139/ssrn.1116550

Contact Information

Susanna Dorigoni (Contact Author)
Bocconi University, Milan ( email )
viale Filippetti, 9
Milan, 20122
HOME PAGE: http://www.iefe.unibocconi.it
Federico Pontoni
Bocconi University ( email )
Via Sarfatti, 25
Milan, MI 20136
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References:  38
Citations:  1

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