January 13, 2009
Ex Post Regulation Facilitates Collusion
Posted by D. Daniel Sokol
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.
January 13, 2009 | Permalink
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