Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/108078
Authors: 
Kocsis, Viktoria
Year of Publication: 
2005
Series/Report no.: 
IEHAS Discussion Papers MT-DP - 2005/13
Abstract: 
Network shares and retail prices are not symmetric in the telecommunications market with multiple bottlenecks which give rise to new questions of access fee regulation. In this paper we consider a model with two types of asymmetry arising from different entry timing, i.e. a larger reputation for the incumbent and lower cost of servicing for the entrant as a result of more advanced technology. As a result firms have divergent preferences over the access fee. In case of linear and non-linear prices the access fee might still act as the instrument of collusion, but only if a side-payment is permitted which is generally welfare decreasing. Moreover, in contrast with the European regulatory framework, the access fee on the basis of termination cost might not necessarily be a socially preferable solution.
Subjects: 
cost asymmetry
brand loyalty
imperfect competition
network interconnection
access fee
JEL: 
L11
L13
L51
L96
Document Type: 
Working Paper

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