Optimal access regulation with downstream competition

Tina Kao, Flavio Menezes and John Quiggin

Journal of Regulatory Economics, 2014, vol. 45, issue 1, 75-93

Abstract: We analyze the setting of access prices for a bottleneck facility where the facility owner also competes in the deregulated downstream market. We consider a continuum of market structures from Cournot to Bertrand. These market structures are fully characterized by a single parameter representing the intensity of competition. We first show how the efficient component pricing rule should be modified as the downstream competitive intensity changes. We then analyse the optimal access price where a regulator trades off production efficiency and pro-competitive effects to maximize total surplus. Copyright Springer Science+Business Media New York 2014

Keywords: Access regulation; Entry; Regulatory commitment; Efficient component pricing rule; L51 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (4)

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Working Paper: Optimal access regulation with downstream competition (2012)
Working Paper: Optimal Access Regulation with Downstream Competition (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:kap:regeco:v:45:y:2014:i:1:p:75-93

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DOI: 10.1007/s11149-013-9231-x

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