Access pricing with unregulated downstream competition

Journal Article (Journal Article)

We examine the optimal design of access tariffs when downstream competition is unregulated but imperfect, and when the regulator is uncertain about the production costs of an unregulated competitor. We show: (1) the regulator optimally sets access prices so as to tilt the playing field in the direction of the more efficient producer, rather than level the playing field as is often advocated in policy debates; (2) the optimal degree of regulatory intervention declines as downstream competition becomes more pronounced; and (3) the regulator optimally reveals to the incumbent supplier any information that arrives about the competitor's production costs. © Elsevier Science B.V.

Full Text

Duke Authors

Cited Authors

  • Lewis, TR; Sappington, DEM

Published Date

  • March 1, 1999

Published In

Volume / Issue

  • 11 / 1

Start / End Page

  • 73 - 100

International Standard Serial Number (ISSN)

  • 0167-6245

Digital Object Identifier (DOI)

  • 10.1016/S0167-6245(99)00004-9

Citation Source

  • Scopus