Network Access Pricing and Deregulation

26 Pages Posted: 11 Jun 2001

Abstract

The paper addresses the question of pricing access to the network facilities of an incumbent firm after deregulation. Network access pricing continues to be regulated in such industries as telecommunications, railroads, electric power and natural gas. We emphasize that access prices should be set such that they should satisfy an individual rationality condition for the incumbent firm so that access is granted voluntarily. We examine the effects of the voluntary access condition on incentives for entry and show that properly chosen access prices provide incentives for efficient entry using several alternative competition models: Bertrand-Nash, Cournot-Nash and Chamberlin competition with differentiated products.

JEL Classification: K0, K2, K21, K23, L4, L5, L51, L9, L96

Suggested Citation

Sidak, J. Gregory and Spulber, Daniel F., Network Access Pricing and Deregulation. Industrial and Corporate Change, Vol. 6, No. 4, pp. 757-782, 1997. Available at SSRN: https://ssrn.com/abstract=272647

J. Gregory Sidak (Contact Author)

Criterion Economics, L.L.C. ( email )

1717 K Street, N.W.
Washington, DC 20006
United States
(202) 518-5121 (Phone)

HOME PAGE: http://www.criterioneconomics.com

Daniel F. Spulber

Northwestern University - Kellogg School of Management ( email )

Kellogg Global Hub
2211 Campus Dr.
Evanston, IL 60208
United States
847-491-8675 (Phone)
847-467-1777 (Fax)

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