The Promise and Pitfalls of Restructuring Network Industries
Journal
German Economic Review
ISSN
1465-6485
ISSN-Digital
1468-0475
Type
journal article
Date Issued
2005-05-01
Author(s)
Abstract
This paper examines the competitive effects of reorganizing a network industry's vertical structure. In this industry, an upstream monopolist operates a network used as an input to produce horizontally differentiated final products that are imperfect substitutes. Three potential pitfalls of restructuring integrated network industries are analyzed: (i) double marginalization, (ii) underinvestment and (iii) vertical foreclosure. The paper studies the net effect of restructuring on retail prices and cost-reducing investment and discusses policy implications.
Language
English
HSG Classification
contribution to scientific community
Refereed
No
Publisher
Blackwell
Publisher place
Oxford
Volume
6
Number
2
Start page
205
End page
228
Pages
24
Subject(s)
Eprints ID
51399