Upstream Competition and Open Access Regimes: Experimental Evidence

Niklas Horstmann, Jan Krämer and Daniel Schnurr
Authors registered in the RePEc Author Service: Jan Krämer ()

26th European Regional ITS Conference, Madrid 2015 from International Telecommunications Society (ITS)

Abstract: We investigate the effects of alternative open access regimes on market performance. In particular, by means of an economic laboratory experiment we compare the market outcomes under unregulated wholesale competition, under a price-fixing rule (where firms must maintain their wholesale price for a fixed period of time), and under a margin squeeze rule (where the retail price of integrated firms must exceed their wholesale price). Our analysis suggests that wholesale and retail prices are substantially reduced by the introduction of a price-fixing rule at the upstream level compared to the unregulated scenario. In contrast, we do not find evidence that a margin squeeze regulation reduces retail market prices. In fact, while such a rule benefits the reselling firm by allowing for a viable profit margin, prices for consumers tend to be even higher than in the unregulated case.

Keywords: Next Generation Access Networks; Access Regulation; Open Access; Upstream Competition; Experimental Economics; Margin Squeeze (search for similar items in EconPapers)
JEL-codes: C92 L51 L90 (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-com, nep-exp, nep-ind and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:itse15:127149

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