Wholesale Access in Multi-Firm Markets: When is it Profitable to Supply a Competitor?
43 Pages Posted: 14 Dec 2006
Date Written: December 2006
Abstract
We address the question whether and on what conditions will an access-seeker be provided with access to a necessary input. We study this question in a model in which multiple vertically-integrated firms - potential access providers - compete. Although it might seem in such a setting that competition for the business of the potential access-seeker will invariably lead to the provision of the necessary input on terms that are sufficiently attractive to induce entry, we find that whether access is provided depends on whether the firms' inputs are homogeneous or differentiated, whether diversion to the entrant's product impacts incumbent firms proportionally or differentially, and whether the entrant can commit to the positioning of its product ex-ante. Our results have implications for policy makers who must decide whether to intervene in access markets.
Keywords: Access pricing, Regulation, Vertical integration
Suggested Citation: Suggested Citation
Do you have negative results from your research you’d like to share?
Recommended Papers
-
By Felix Höffler and Klaus M. Schmidt
-
By Felix Höffler and Klaus M. Schmidt
-
On the Consistent Use of Linear Demand Systems if Not All Varieties are Available
-
Wholesale Markets in Telecommunications
By Marc Bourreau, Johan Hombert, ...
-
By Derek J. Clark, Øystein Foros, ...
-
Supporter Influence on Club Governance in a Sports League: A 'Utility Maximization' Model
By Paul Madden and Terry Robinson
-
Competition for Access: Spectrum Rights and Downstream Access in Wireless Telecommunications
By Gijsbert Zwart and Michiel Bijlsma
-
Sports League Quality, Broadcaster TV Rights Bids and Wholesale Regulation of Sports Channels
By Paul Madden and Mario Pezzino