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Article contents
Access charge and imperfect competition
Published online by Cambridge University Press: 17 August 2016
Summary
A benevolent social planner, which faces a cost of public funds because of distortive taxation, wants to finance an upstream monopoly. This monopoly produces a necessary input for a downstream competitive sector which competes á la Cournot (with either a fixed number of firms or free entry in the downstream sector). We show that in both cases an ad valorem access charge is a better regulatory tool than a per unit access charge if the access charges are restrained to be positive. The reverse holds when access charges are used to subsidize the downstream market. We then analyze the incidence of the imperfect competition on final prices.
Résumé
Un gouvernement bienveillant qui fait face à un coût exogène des fonds publics (à cause d'un système fiscal imparfait) souhaite financer un monopole (un opérateur de téléphone local, par exemple) qui produit un bien nécessaire pour des firmes en compétition à la Cournot (l'accès à ce réseau local pour des opérateurs longues distances). Nous montrons qu'une charge d'accès ad valorem est un instrument de régulation plus efficace qu'une charge d'accès unitaire si ces deux dernières doivent être positivies (si elles sont négatives, pour une subvention, le meilleur instrument est la charge d'accès unitaire). Ce résultat est établi avec un nombre fixe d'entreprises ou avec entrée libre dans le secteur aval. Enfin, nous étudions l'impact sur les prix finaux de la concurrence imparfaite.
Keywords
- Type
- Research Article
- Information
- Recherches Économiques de Louvain/ Louvain Economic Review , Volume 69 , Issue 3 , 2003 , pp. 319 - 340
- Copyright
- Copyright © Université catholique de Louvain, Institut de recherches économiques et sociales 2003
Footnotes
*
We thank Helmuth Cremer and Jacques Crémer and an anonymous referee for their help and comments. We also thank John Turtle and the participants at the European Economic Association congress (EEA 2000, Bolzano), at the European Association for Research in Industrial Economics conference (EARIE 2000, Lausanne), at the Journées de Microéconomie appliquée (JMA 1999, Lyon) and at the ENTER Jamboree (London) for their useful remarks, especially Carmelo Rodriguez. Both of us thank also GREMAQ (University of Toulouse, France) as well as CORE (Université catholique de Louvain, Belgium) for their hospitality and their financial support. Eventuelly, Cyril Hariton gratefully acknowledges financial support by the European Commission through her Marie-Curie Fellowship (HPMF-CT-2002-02172).
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