Premium
Competitive Neutrality in Access Pricing
Author(s) -
Gans Joshua S.,
King Stephen P.
Publication year - 2005
Publication title -
australian economic review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.308
H-Index - 29
eISSN - 1467-8462
pISSN - 0004-9018
DOI - 10.1111/j.1467-8462.2005.00361.x
Subject(s) - neutrality , marginal cost , bottleneck , oligopoly , downstream (manufacturing) , upstream (networking) , economics , microeconomics , vertical integration , industrial organization , unit (ring theory) , cournot competition , computer science , telecommunications , operations management , mathematics , philosophy , mathematics education , epistemology
This article examines the notion of competitive neutrality when setting access prices for vertically integrated bottleneck networks. In contrast to the claims of regulated firms (for example, Telstra), it is not possible to argue that access charges that involve unit prices in excess of short‐run marginal cost reflect competitive neutrality. That is, we demonstrate that in general models of downstream oligopoly, upstream prices that differ from marginal cost are not competitively neutral in the sense of placing integrated and non‐integrated firms on an equal basis.