A SIMPLE APPROACH TO NETWORK COMPETITION

Chongmin Kim ()
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Chongmin Kim: School of Economics, Kookmin Univesity

Journal of Economic Development, 2004, vol. 29, issue 2, 163-176

Abstract: This paper develops a simple model of competition among interconnected networks. Access fees are determined either by a regulator or by competition. We show that the price is higher when they compete in both access prices and final tariffs non-cooperatively than when the access fees are regulated. We also show that incentives to collude are higher when access fees are regulated to the level of marginal cost of access services. Thus it is ambiguous to judge the net effect of competition on prices and relevant regulations are necessary to enhance welfare effects.

Keywords: Network Competition; Access Pricing; Tacit Collusion (search for similar items in EconPapers)
JEL-codes: D43 L10 L14 (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:jed:journl:v:29:y:2004:i:2:p:163-176

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