Comparison of investment regimes with cost-based access pricing rules

Keizo Mizuno

Japan and the World Economy, 2009, vol. 21, issue 3, pages 248-255

Abstract: This paper examines a network owner's incentive for access innovation (i.e., the reduction of access cost) and compares two investment regimes (cooperation and noncooperation) under cost-based access pricing rules. When the access pricing rule is based on access cost, it brings about a spillover effect. It is then shown that when the spillover effect is large (small), a cooperative investment regime achieves a lower (higher) access cost than a noncooperative investment regime. In addition, when a regulator adopts an incremental access cost rule that requires the access charge to equal the access cost, a cooperative investment regime achieves greater social welfare than a noncooperative investment regime.

Keywords: Access; charge; Access; innovation; Cooperation (search for similar items in EconPapers)
Date: 2009

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Persistent link: http://EconPapers.repec.org/RePEc:eee:japwor:v:21:y:2009:i:3:p:248-255

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