Access pricing and market structure

Koji Domon, Koshiro Ota

Research output: Contribution to journalArticle

7 Citations (Scopus)

Abstract

In telecommunications industries access charge problems are important issues during deregulation. In Japan and the US, deregulation also involves the issue of industrial structures as integration or divestiture of a long-distance sector. This paper analyzes access charge problems by introducing effects of the divestiture on cost functions. We show how the effects influence economic welfare under the integration and the divestiture in the Stackelberg model. The main result is that, without regulation, welfare losses, caused by an effect of double marginalization in the divestiture case, are not crucial when an entrant and a divested long-distance firm can make use of an efficient cost function. We also obtain a relationship between Ramsey access charges and the Efficient Component Pricing Rule.

Original languageEnglish
Pages (from-to)77-93
Number of pages17
JournalInformation Economics and Policy
Volume13
Issue number1
DOIs
Publication statusPublished - 2001 Mar 1

Keywords

  • Access pricing
  • Divestiture effects
  • Efficient component pricing rule
  • Veritical integration

ASJC Scopus subject areas

  • Economics and Econometrics
  • Management, Monitoring, Policy and Law

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