Price Squeezes in a Regulatory Environment

Jan Bouckaert and Frank Verboven

Journal of Regulatory Economics, 2004, vol. 26, issue 3, 351 pages

Abstract: This paper analyzes the relevance and the scope of price squeeze tests in a regulatory environment. We distinguish between three types of ex ante regulation (full, partial or no regulation) to identify regulatory squeezes, predatory squeezes, and squeezes as foreclosure. We argue that policy makers should (i) use price squeeze tests as an ex post instrument, compatible with the ex ante regulatory environment, and (ii) focus on predatory price squeezes. We propose a predatory squeeze test that respects regulatory choices that have been made previously, in contrast with the earlier proposed tests. We extend our framework to ask at which aggregation level predatory price squeeze tests ought to be applied, a much-debated issue in telecommunications. Copyright Kluwer Academic Publishers 2004

Keywords: regulation; competition policy; utilities (search for similar items in EconPapers)
Date: 2004
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Citations: View citations in EconPapers (19)

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DOI: 10.1007/s11149-004-7554-3

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