Co-Investments and Tacit Collusion in Regulated Network Industries: Experimental Evidence

Krämer Jan () and Ingo Vogelsang
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Krämer Jan: University of Passau, Chair of Internet and Telecommunications Business, Dr-Hans-Kapfinger-Str. 12, 94032 Passau, Germany, Tel.: +49-851-509-2580, Fax: +49-851-509-2592
Authors registered in the RePEc Author Service: Jan Krämer ()

Review of Network Economics, 2016, vol. 15, issue 1, 35-61

Abstract: Several regulatory authorities have recently allowed competing network operators to co-invest in network infrastructure. With the use of a laboratory experiment, we investigate the impact of co-investments on competition in regulated network industries, particularly in comparison to unilateral and duplicate investments. Our main finding is that co-investment (i.e. cooperation at the infrastructure level) facilitates tacit collusion (i.e. cooperation at the retail level) significantly, which questions the positive evaluation of co-investments with respect to consumers’ surplus in the theoretical literature.

Keywords: co-investment; collusion; experimental economics; network industries; regulation (search for similar items in EconPapers)
JEL-codes: C92 D22 L13 L51 L97 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (4)

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Working Paper: Co-investments and tacit collusion in regulated network industries: Experimental evidence (2012)
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DOI: 10.1515/rne-2016-0026

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