Should uniform pricing constraints be imposed on entrants?
This paper analyzes uniform pricing, coverage constraints and price caps in markets newly opened to competition, e.g. broadband services. We show that the requirement of uniform pricing has strong repercussions on coverage decisions. Imposed on incumbents only it may distort their coverage decision...
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| Veröffentlicht in: | Journal of regulatory economics 2006-08, Vol.30 (2), p.199-216 |
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| container_end_page | 216 |
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| container_title | Journal of regulatory economics |
| container_volume | 30 |
| creator | Hoernig, Steffen H |
| description | This paper analyzes uniform pricing, coverage constraints and price caps in markets newly opened to competition, e.g. broadband services. We show that the requirement of uniform pricing has strong repercussions on coverage decisions. Imposed on incumbents only it may distort their coverage decision downward to avoid duopoly entry. If also imposed on entrants it increases the likelihood that entry leads to independent monopolies rather than competition. A sufficiently large coverage constraint on incumbents reestablishes incentives for duopoly entry, but may lead to higher prices. [PUBLICATION ABSTRACT] |
| doi_str_mv | 10.1007/s11149-006-0013-6 |
| format | Article |
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| fulltext | fulltext |
| identifier | ISSN: 0922-680X |
| ispartof | Journal of regulatory economics, 2006-08, Vol.30 (2), p.199-216 |
| issn | 0922-680X 1573-0468 |
| language | eng |
| recordid | cdi_proquest_miscellaneous_36558358 |
| source | Business Source Complete; SpringerLink Journals - AutoHoldings |
| subjects | Broadband Competition Costs Duopoly Economic models Economic regulation Equilibrium Incumbency Market entry Market theory Monopolies Price competition Price formation Prices Pricing Pricing policies Profits Rural areas Studies |
| title | Should uniform pricing constraints be imposed on entrants? |
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