Distorted access regulation with strategic investments: Regulatory non-commitment and spillovers revisited

Keizo Mizuno and Ichiro Yoshino

Information Economics and Policy, 2012, vol. 24, issue 2, 120-131

Abstract: We reexamine the properties of access regulation and an incumbent’s incentive for infrastructure investment under regulatory non-commitment and spillovers through access. The results show that when the degree of spillover is small, the incumbent’s strategic opportunity to invest in infrastructure distorts the access charge set by a regulator from a welfare perspective. In particular, when the degree of spillover is small and the incumbent’s investment cost is high (low), the incumbent has an incentive to utilize regulatory non-commitment to induce a high (low) access charge by overinvesting (underinvesting) in infrastructure.

Keywords: Access charge; Regulatory non-commitment; Spillovers (search for similar items in EconPapers)
JEL-codes: L43 L51 L96 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:iepoli:v:24:y:2012:i:2:p:120-131

DOI: 10.1016/j.infoecopol.2012.02.003

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