By Ralf Dewenter, Justus Haucap
Entry to crucial amenities or so-called bottlenecks has develop into the most important public coverage factor for the liberalization of community industries equivalent to telecommunications, electrical energy, rail and so forth. nonetheless, entry costs aren't simply vital for pageant in previously monopolistic industries, but in addition for industries the place pageant has lengthy been confirmed reminiscent of money and bank card networks or cellular telecommunications. because the latter industries have additionally come below nearer scrutiny by means of regulatory enterprises and festival specialists, this ebook is devoted to the research of entry pricing in idea and perform. The constitution of this publication that's geared up in 5 components is as follows: The prolonged creation will introduce the main recommendations and concerns together with a quick clarification of the basic facility idea in addition to the excellence among one-way and two-way entry and should in short survey the most contributions in the literature on entry pricing thought and perform. whereas components I and II care for the idea of one-way and two-way entry pricing, respectively, half III makes a speciality of the newly rising thought of entry pricing with multihoming. elements IV and V handle the perform aspect and concentrate on industry-specific purposes and targeted difficulties (Part IV) in addition to public coverage matters (Part V). This publication presents worthwhile theoretical and empirical analyses in entry Pricing and comparable issues. It bargains numerous various issues of view. It good points study from hugely reputed scientists operating during this box.
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Extra info for Access Pricing: Theory and Practice
In general, multihoming tends to be asymmetric with regard to merchants and customers. When one side is multihoming intensively, the other market side is not likely to multihome to a high degree. 1 Applications to specific markets Since access pricing is essential for various network industries with different characteristics, general results do not necessarily hold at large. There are some industry-specific peculiarities which have to Chapter 1 – Access Pricing: An Introduction 27 be embraced when considering specific markets.
Under the ECPR access charges are based on the monopolist’s opportunity cost of providing access, including any forgone (monopoly) profit. Expressed in terms of the so-called margin rule the access charge should be set equal to the price usually charged for the retail service less the cost not incurred when interconnecting a rival instead of selling retail services. The opportunity cost 12 Ralf Dewenter and Justus Haucap expression states that the optimal access fee equals the marginal cost of providing the network service plus the profit forgone when not selling the retail service but interconnecting a rival.
Peitz, M. (2005): ‘Asymmetric access price regulation in telecommunications’, European Economic Review 49: 341–358. , D. Patterson, and J. S. antitrust law’, Antitrust Law Journal 70: 443–462. Rey, P. and J. Tirole (2006): ‘A primer on foreclosure’, forthcoming in Armstrong, M. H. Porter (eds), Handbook of Industrial Organization, Vol. 3, Elsevier, Amsterdam. C. and J. Tirole (2006): ‘Two-sided markets: A progress report’, Mimeo, forthcoming in RAND Journal of Economics. -H. and L. Waverman, (2001): ‘Telecommunications infrastructure and economic development: A simultaneous approach’, American Economic Review 91: 899–923.
Access Pricing: Theory and Practice by Ralf Dewenter, Justus Haucap