Regulation and Access Pricing with Asymmetric Information

Gianni De Fraja

No 1122, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We study in this paper whether the price charged to a competitor for the use of an essential input produced in conditions of natural monopoly should reflect only considerations of relative efficiency between the various potential suppliers. In a model that captures the technological conditions operating in industries such as telephony, gas, rail, where access to a distribution network is essential to the ability to compete, we show that this is not the case. Instead, the access price should be set `pro-competitively': it may be socially optimal to award production to a firm less efficient than the owner of the network.

Keywords: Access; Competition in Regulated Markets; Network; Regulation (search for similar items in EconPapers)
JEL-codes: L51 (search for similar items in EconPapers)
Date: 1995-01
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Regulation and access pricing with asymmetric information (1999)
Working Paper: Regulation and Access Pricing with Asymmetric Information
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