Competitive Neutrality in Access Pricing

9 Pages Posted: 5 Jul 2005

See all articles by Joshua S. Gans

Joshua S. Gans

University of Toronto - Rotman School of Management; NBER

Stephen P. King

Monash University - Department of Economics; Productivity Commission

Abstract

This article examines the notion of competitive neutrality when setting access prices for vertically integrated bottleneck networks. In contrast to the claims of regulated firms (for example, Telstra), it is not possible to argue that access charges that involve unit prices in excess of short-run marginal cost reflect competitive neutrality. That is, we demonstrate that in general models of downstream oligopoly, upstream prices that differ from marginal cost are not competitively neutral in the sense of placing integrated and non-integrated firms on an equal basis.

Suggested Citation

Gans, Joshua S. and King, Stephen Peter, Competitive Neutrality in Access Pricing. Australian Economic Review, Vol. 38, No. 2, pp. 128-136, June 2005, Available at SSRN: https://ssrn.com/abstract=745566

Joshua S. Gans (Contact Author)

University of Toronto - Rotman School of Management ( email )

Canada

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

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Stephen Peter King

Monash University - Department of Economics ( email )

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Australia

Productivity Commission ( email )

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Melbourne, Victoria, Victoria 3000
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