Quality Provision in Deregulated Industries: The Railtrack Problem

Men-Andri Benz (), Stefan Buehler and Armin Schmutzler
Additional contact information
Men-Andri Benz: Institute for Strategy and Business Economics, University of Zurich

No 2, SOI - Working Papers from Socioeconomic Institute - University of Zurich

Abstract: This paper studies a network provider's incentives to invest in infrastructure quality. In a simple but general framework, we investigate how various institutional settings affect investment incentives. We show that under reasonable assumptions on demand, investment incentives are smaller under vertical separation than under vertical integration. We consider two strategies for improving investment incentives under vertical separation. First, the introduction of competition for the market can sometimes improve incentives. Second, with non-linear access prices investment incentives under separation become identical to those under integration.

Keywords: investment incentives; networks; quality; railways; vertical externality (search for similar items in EconPapers)
JEL-codes: D42 L22 L43 L92 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2000-06
References: View references in EconPapers View complete reference list from CitEc
Citations:

Published in International Journal of Industrial Organization 22(2), 2004, pages 253-267

Downloads: (external link)
https://www.zora.uzh.ch/id/eprint/52154/1/wp0002.pdf First version, 2000 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:soz:wpaper:0002

Access Statistics for this paper

More papers in SOI - Working Papers from Socioeconomic Institute - University of Zurich Contact information at EDIRC.
Bibliographic data for series maintained by Severin Oswald ().