Access charges, vertical separation, and lobbying

Toshihiro Matsumura and Noriaki Matsushima

ISER Discussion Paper from Institute of Social and Economic Research, The University of Osaka

Abstract: We examine how vertical separation affects the lobbying activities forthe access charge of essential facilities. First, when investigating a model where the number of new entrants is fixed, we find that vertical separation either increases or decreases the access charge, and that this depends on the relative efficiency between the incumbent and the new entrants, and the number of entrants. Second, when investigating a free-entry market, we find that vertical separation always reduces the access charge in such a market. The vertically integratedfirm has a stronger incentive to lobby in this market because a higher access charge reduces the number of competitors.

Date: 2011-05
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https://www.iser.osaka-u.ac.jp/static/resources/docs/dp/2011/DP0810.pdf

Related works:
Working Paper: Access Charge, Vertical Separation, and Lobbying (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:dpr:wpaper:0810

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