Access charges and quality choice in competing networks

Access charges and quality choice in competing networks

We study the impact of reciprocal access charges on the incentives to invest in networks of higher quality. We show how private and social preferences always diverge once investments are endogenized. Private negotiations never lead to charges being set at their marginal cost. Whether or not marginal...

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Veröffentlicht in:Information economics and policy 2004-09, Vol.16 (3), p.391-409
Hauptverfasser: Cambini, Carlo, Valletti, Tommaso M.
Format: Artikel
Sprache:eng
Schlagworte:
Access charges
Competition
Interconnection
Investment
Investments
Networks
Policy studies
Pricing policies
Quality
Quality standards
Telecommunications
Telecommunications industry
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Zusammenfassung:We study the impact of reciprocal access charges on the incentives to invest in networks of higher quality. We show how private and social preferences always diverge once investments are endogenized. Private negotiations never lead to charges being set at their marginal cost. Whether or not marginal cost charges have good dynamic properties depends on the way investments in quality impact on traffic generated on the networks.
ISSN:0167-6245
1873-5975
DOI:10.1016/j.infoecopol.2004.01.007