Competition vs. Regulation in Mobile Telecommunications

Johan Stennek () and Thomas Tangerås ()
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Johan Stennek: Research Institute of Industrial Economics, Postal: P.O. Box 55665, SE-102 15 Stockholm, Sweden

No 685, Working Paper Series from Research Institute of Industrial Economics

Abstract: This paper questions whether competition can replace sector-specific regulation of mobile telecommunications. We show that the monopolistic outcome prevails independently of market concentration when access prices are determined in bilateral negotiations. A light-handed regulatory policy can induce effective competition. Call prices are close to the marginal cost if the networks are sufficiently close substitutes. Neither demand nor cost information is required. A unique and symmetric call price equilibrium exists under symmetric access prices, provided that call demand is sufficiently inelastic. Existence encompasses the case of many networks and high network substitutability.

Keywords: Network Competition; Two-way Access; Access Price Competition; Entry; Regulation; Network Substitutability (search for similar items in EconPapers)
JEL-codes: L51 L96 (search for similar items in EconPapers)
Pages: 50 pages
Date: 2006-12-20
New Economics Papers: this item is included in nep-com, nep-ind, nep-mic, nep-net and nep-reg
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Citations: View citations in EconPapers (1)

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Related works:
Working Paper: Competition vs. Regulation in Mobile Telecommunications (2008)
Working Paper: Competition vs. Regulation in Mobile Telecommunications (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:iuiwop:0685

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