Ex Post Regulation Facilitates Collusion

Abstract:     
Under ex ante access regulation entrants often claim that access fees are excessive. I show that this is only the case if further entry is admitted. If the entrant is protected from further entry it would agree with the incumbent upon a strictly positive access fee which may exceed the efficient level. Ex post regulation facilitates this type of collusion and should be abandoned.

Number of Pages in PDF File: 13

Keywords: entry deterrence, access regulation, network infrastructure, vertical differentiation

JEL Classification: K21, K23, L42, L51

working papers series