Infrastructure Quality in Deregulated Industries: Is there an Underinvestment Problem?

Armin Schmutzler, Men-Andri Benz and Bühler, Stefan
Authors registered in the RePEc Author Service: Stefan Buehler

No 3836, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: We investigate how various institutional settings affect a network provider?s incentives to invest in infrastructure quality. Under reasonable assumptions on demand, investment incentives turn out to be smaller under vertical separation than under vertical integration, though we also provide counter-examples. The introduction of downstream competition for the market can sometimes improve incentives. With suitable non-linear access prices investment incentives under separation become identical to those under integration.

Keywords: Investment incentives; Networks; Quality; Vertical externality (search for similar items in EconPapers)
JEL-codes: D42 L22 L43 (search for similar items in EconPapers)
Date: 2003-03
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Journal Article: Infrastructure quality in deregulated industries: is there an underinvestment problem? (2004)
Working Paper: Infrastructure Quality in Deregulated Industries: Is there an Underinvestment Problem? (2002)
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