Cooperative investment, access, and uncertainty

Marc Bourreau, Carlo Cambini and Steffen Hoernig

International Journal of Industrial Organization, 2018, vol. 56, issue C, 78-106

Abstract: This paper compares the impacts of traditional one-way access obligations and the new regulatory scheme of co-investment on the roll-out of network infrastructures. We show that compulsory access leads to smaller roll-out, first because it reduces the returns from investment, and second because in the presence of uncertainty it provides access seekers with an option whose exercise hurts investors. Co-investment without access obligations leads to risk sharing and eliminates the access option, implying highest network coverage. Allowing for access on top of co-investment actually decreases welfare if the access price is low.

Keywords: Co-investment; Access obligations; Next generation networks; Uncertainty (search for similar items in EconPapers)
JEL-codes: L51 L96 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

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Working Paper: Cooperative investment, access, and uncertainty (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:56:y:2018:i:c:p:78-106

DOI: 10.1016/j.ijindorg.2017.11.004

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