Open AccessAccess Pricing Under Imperfect Competition Reconsidered
Author(s) -
Rostislav Staněk,
Michal Kvasnička
Publication year - 2012
Publication title -
národohospodářský obzor
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.178
H-Index - 8
eISSN - 1804-1663
pISSN - 1213-2446
DOI - 10.2478/v10135-012-0012-8
Subject(s) - competitor analysis , oligopoly , monopoly , cournot competition , economics , microeconomics , imperfect , competition (biology) , imperfect competition , industrial organization , profit (economics) , key (lock) , market share , predatory pricing , computer science , finance , ecology , linguistics , philosophy , computer security , management , biology
This paper claims that Onemli’s results published in “Access Pricing under Imperfect Competition”, Review of Economic Perspectives , 2012, are incorrect. Contrary to Onemli, we claim that in an industry, where a monopoly incumbent produces a key input used by itself and its competitors on a downstream market which is Cournot oligopoly, the regulator should set the second-best access charge such that the incumbent’s total profit is zero if the first-best access charge is not feasible. The competitors’ ability to produce the key input themselves does not change the outcome since no competitor chooses to use this option under this regulation. We also discuss some limitations of the Onemli’s model.