COMPETITION AND ACCESS REGULATION IN THE TELECOMMUNICATIONS INDUSTRY WITH MULTIPLE NETWORKS

Yan Liu and Guang-Zhen Sun

No 25/08, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: We develop a framework, extending the conventional duopoly model by replacing the Hotelling line with a simplex in high???dimension spaces, to study the competition and access regulation of multiple networks. We first characterize the competitive equilibrium when the substitutabilities of the networks are not too high, or the access charges are nearly cost???based. We then analyse how the equilibrium market shares respond to marginal variations in the access charges under various regimes of access regulation, and thereby examine the efficiency implications of such regulation regimes. In particular, we analyze the asymmetric scenario in which some networks are incumbent and some are entrants. It is shown that some existing results of the duopoly do not extend to a multi???firm setting, largely because regulation of multiple networks is structurally far richer.

Keywords: Telecommunications; oligopoly; network competition; access regulation. (search for similar items in EconPapers)
JEL-codes: D43 L51 L96 (search for similar items in EconPapers)
Pages: 17 pages
Date: 2008-09-01
New Economics Papers: this item is included in nep-com, nep-cse, nep-mic, nep-net and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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