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Contribution Details

Type Working Paper
Scope Discipline-based scholarship
Title How to Regulate Vertical Market Structure in Network Industries
Organization Unit
Authors
  • Stefan Buehler
Language
  • English
Institution University of Zurich
Series Name Working paper series / Socioeconomic Institute
Number No. 102
Date 2001
Abstract Text This paper analyzes the equilibrium outcomes in a network industry under daccess pricing, investment, vertical foreclosureifferent vertical market structures. 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 drawbacks of market structure regulation are analyzed: (i) double marginalization, (ii) underinvestment, and (iii) vertical foreclosure. We explore the conditions under which these effects emerge and discuss when the breakup of an integrated network monopolist is adequate.
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