Price Squeezes and Imputation Tests on Next Generation Access Networks

Henry Ergas, Eric Ralph and Emma Lanigan
Additional contact information
Henry Ergas: Deloitte
Emma Lanigan: independent consultant

Communications & Strategies, 2010, vol. 1, issue 78, 67-86

Abstract: A vertically integrated firm that wholesales to its retail rivals can, if it has sufficient market power, set the margin between its retail and wholesale prices so as to harm its rivals. Conventionally, an imputation test is used to determine whether such behavior is being undertaken. Such tests are common in electronic communications, and the EC calls for their potentially intensive ex ante application in the supply of NGANs. This paper shows that while imputation tests are helpful analytical tools for understanding the nature of price squeezes, difficulties associated with implementation, which are sharp in an NGAN context, can make them misleading in practice. Instead, price squeezes are best dealt with through the rigorous comparison of expected outcomes, given the alleged anticompetitive behavior, with the outcomes expected in that behavior’s absence. Such analysis is not suited to ex ante application.

Keywords: price squeeze; imputation tests; next generation access networks; vertical discrimination; electronic communications; regulation (search for similar items in EconPapers)
JEL-codes: O00 (search for similar items in EconPapers)
Date: 2010
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://repec.idate.org/RePEc/idt/journl/CS7804/CS78_ERGAS_RALPH_LANIGAN.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:idt:journl:cs7804

Access Statistics for this article

More articles in Communications & Strategies from IDATE, Com&Strat dept. Contact information at EDIRC.
Bibliographic data for series maintained by BLAVIER Thomas ( this e-mail address is bad, please contact ).