Delegating Infrastructure Projects with Open Access

Keizo Mizuno and Tetsuya Shinkai ()

No 28, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: This paper provides a simple model that examines a firm fs incentive to invest in a network infrastructure through coalition formation in an open access environment with a deregulated retail market. A regulator faces a dilemma between inducing an incentive for efficient investment and reducing the distortion generated by imperfect competition. We show that, in such a case, the degree of cost-reducing effect of the investment is crucial from a welfare point of view. In particular, when network investment through coalition formation creates a large (small) cost-reducing effect, the regulator can (should not) delegate an investment decision to firms with an appropriate level of access charge.

Keywords: Network infrastructure; Coalition; Access Charge; Delegation (search for similar items in EconPapers)
JEL-codes: L13 L22 L43 L90 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2006-01, Revised 2006-01
New Economics Papers: this item is included in nep-bec, nep-com, nep-mic, nep-net and nep-ppm
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in Journal of Economics, 2006, vol. 88, issue 3, pages 243-261

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http://192.218.163.163/RePEc/pdf/kgdp28.pdf First version, 2006 (application/pdf)

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Journal Article: Delegating Infrastructure Projects with Open Access (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:kgu:wpaper:28

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