Ex Post Regulation Facilitates Collusion
Centre for European Economic Research (ZEW)
ZEW - Centre for European Economic Research Discussion Paper No. 08-099
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
Date posted: December 10, 2008