Should uniform pricing constraints be imposed on entrants?

Steffen Hoernig

Nova SBE Working Paper Series from Universidade Nova de Lisboa, Nova School of Business and Economics

Abstract: We analyse the effects of universal service obligations, such as uniform pricing, price caps and unbundling, on allocations in markets newly opened to competition, e.g. telecommunications. If uniform pricing is imposed not only on incumbents but also on entrants, entry may not result in competition if installed capacity is low, or may neglect high-cost areas if installed capacity or mandated coverage is high. These results hold no matter whether a price cap is in place or not, and do not depend on whether entry is capacity-based or facilitated through unbundling.

Keywords: Universal service obligations; uniform pricing; price caps; unbundling; entry (search for similar items in EconPapers)
JEL-codes: L43 L51 L52 (search for similar items in EconPapers)
Pages: 27 pages
Date: 2002
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Should uniform pricing constraints be imposed on entrants? (2006)
Working Paper: Should Uniform Pricing Contraints be Imposed on Entrants? (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:unl:unlfep:wp417

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