Ex Post Regulation Facilitates Collusion

Posted by D. Daniel Sokol

Patrick Beschorner, Centre for European Economic Research, argues that Ex Post Regulation Facilitates Collusion.

ABSTRACT: Under ex ante access regulation entrants often claim that access fees are excessive. I show that this is only the case if further entry is admitted. If the entrant is protected from further entry it would agree with the incumbent upon a strictly positive access fee which may exceed the efficient level. Ex post regulation facilitates this type of collusion and should be abandoned.