Asymmetric Networks and Access Charges
Alexander Correa ()
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Alexander Correa: Modeling for Management and Public Policy, Jorge Tadeo Lozano University, Bogotá, Colombia
Journal of International Commerce, Economics and Policy (JICEP), 2019, vol. 10, issue 01, 1-22
In order to suggest an appropriate regulatory regime in the context of firm asymmetry, this study has developed a mathematical model that allows to elucidate comparisons of three different regulatory scenarios. In the unregulated market, the low-cost firm is more likely to become dominant in the market. Symmetric regulation has an immediate effect on off-net prices, which fall to the level of its marginal costs. Finally, asymmetric regulation is a highly effective way of promoting market entry. Asymmetric regulation can generate higher social welfare.
Keywords: Access charge regulation; asymmetry; reputation; interconnection (search for similar items in EconPapers)
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