IDEAS home Printed from https://ideas.repec.org/a/eee/ingrde/v3y2024i1s2949753123000632.html
   My bibliography  Save this article

Economic analysis of process innovation: The case study of the German telecommunication market

Author

Listed:
  • Yang, Chuan
  • Kawashima, Yasuo

Abstract

The effects of a new firm's entry into the telecom service market are examined further. These consist of up- and downstream markets, corresponding to the first and second stages in game theory. When a new entrant can succeed in process innovation and lower production cost, entry of the entrant transforms the market structure into a Joint-Profit-Maximization monopoly under the European Commission (EC) constraint. However, the post-entry market becomes more competitive if the EC did not intervene the market. We observed that violation of the test does not necessarily mean the incumbent practices a margin squeeze. The EC does not prove that margin squeeze is a necessary and sufficient condition for the exit. Furthermore, Joint-Profit-Maximization monopoly can serve to explain why Japanese Telecoms fees are high.

Suggested Citation

  • Yang, Chuan & Kawashima, Yasuo, 2024. "Economic analysis of process innovation: The case study of the German telecommunication market," Innovation and Green Development, Elsevier, vol. 3(1).
    • Handle: RePEc:eee:ingrde:v:3:y:2024:i:1:s2949753123000632
    DOI: 10.1016/j.igd.2023.100095
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S2949753123000632
    Download Restriction: Open-access
    File URL: https://libkey.io/10.1016/j.igd.2023.100095?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Jan Bouckaert & Frank Verboven, 2004. "Price Squeezes in a Regulatory Environment," Journal of Regulatory Economics, Springer, vol. 26(3), pages 321-351, August.
    2. J. Gregory Sidak, 2008. "Abolishing The Price Squeeze As A Theory Of Antitrust Liability," Journal of Competition Law and Economics, Oxford University Press, vol. 4(2), pages 279-309.
    3. Dennis W. Carlton, 2008. "Should “Price Squeeze” Be A Recognized Form Of Anticompetitive Conduct?," Journal of Competition Law and Economics, Oxford University Press, vol. 4(2), pages 271-278.
    4. Alberto Heimler, 2010. "Is A Margin Squeeze An Antitrust Or A Regulatory Violation?," Journal of Competition Law and Economics, Oxford University Press, vol. 6(4), pages 879-890.
    5. Awan, Abdul Ghafoor & Yaqoob, Robina, 2023. "Economic value of introducing technology to improve productivity: An ARDL approach," Innovation and Green Development, Elsevier, vol. 2(3).
    6. Laura Ferrari Bravo & Paolo Siciliani, 2007. "Exclusionary Pricing And Consumers Harm: The European Commission'S Practice In The Dsl Market," Journal of Competition Law and Economics, Oxford University Press, vol. 3(2), pages 243-279.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rey, Patrick & Jullien, Bruno & Saavedra, Claudia, 2014. "The Economics of Margin Squeeze," CEPR Discussion Papers 9905, C.E.P.R. Discussion Papers.
    2. Justus Haucap & Torben Stühmeier, 2016. "Competition and antitrust in Internet markets," Chapters, in: Johannes M. Bauer & Michael Latzer (ed.), Handbook on the Economics of the Internet, chapter 9, pages 183-210, Edward Elgar Publishing.
    3. Gaudin, Germain & Saavedra, Claudia, 2014. "Ex ante margin squeeze tests in the telecommunications industry: What is a reasonably efficient operator?," Telecommunications Policy, Elsevier, vol. 38(2), pages 157-172.
    4. Christoph Kleineberg & Thomas Wein, 2015. "Relevance and Detection Problems of Margin Squeeze – The Case of German Gasoline Prices," Working Paper Series in Economics 355, University of Lüneburg, Institute of Economics.
    5. Yuta Kittaka & Noriaki Matsushima & Fuyuki Saruta, 2021. "Competition between physical and electronic content retailers," ISER Discussion Paper 1123, Institute of Social and Economic Research, Osaka University.
    6. Calzada, Joan & Martínez-Santos, Fernando, 2014. "Broadband prices in the European Union: Competition and commercial strategies," Information Economics and Policy, Elsevier, vol. 27(C), pages 24-38.
    7. Christoph Kleineberg & Thomas Wein, 2017. "Verdrängungspreise an Tankstellen?," Working Paper Series in Economics 375, University of Lüneburg, Institute of Economics.
    8. Yannelis, Demetrius, 2010. "Price Squeeze in Practice: Is it a Profitable Strategy?," 21st European Regional ITS Conference, Copenhagen 2010: Telecommunications at new crossroads - Changing value configurations, user roles, and regulation 40, International Telecommunications Society (ITS).
    9. Zhijun Chen, 2021. "Price Squeezes as an Exploitative Abuse," Monash Economics Working Papers 2021-05, Monash University, Department of Economics.
    10. Stephen Martin & Jan Vandekerckhove, 2010. "Market Performance Implications of the Transfer Price Rule," Purdue University Economics Working Papers 1238, Purdue University, Department of Economics.
    11. Kittaka, Yuta & Matsushima, Noriaki & Saruta, Fuyuki, 2022. "Negative effect of price-matching policy on traditional retailers in a dual-channel supply chain with different content formats," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 161(C).
    12. Krämer, Jan & Schnurr, Daniel, 2018. "Margin squeeze regulation and infrastructure competition," Information Economics and Policy, Elsevier, vol. 45(C), pages 30-46.
    13. Thomas Wein, 2014. "Preventing Margin Squeeze: An Unsolvable Puzzle for Competition Policy? The Case of the German Gasoline Market," Working Paper Series in Economics 309, University of Lüneburg, Institute of Economics.
    14. Stennek, Johan & Tangerås, Thomas, 2006. "Competition vs. Regulation in Mobile Telecommunications," Working Paper Series 685, Research Institute of Industrial Economics.
    15. Wen, Jun & Zhang, Sen & Chang, Chun-Ping & Anugrah, Donni Fajar & Affandi, Yoga, 2023. "Does climate vulnerability promote green investment under energy supply restriction?," Energy Economics, Elsevier, vol. 124(C).
    16. Howell, Bronwyn, 2008. "The End or the Means? The Pursuit of Competition in Regulated Telecommunications Markets," Working Paper Series 4002, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    17. Howell, Bronwyn, 2009. "Politics and the Pursuit of Efficiency in New Zealand's Telecommunications Sector 1987-2008," Working Paper Series 19134, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.
    18. repec:hal:spmain:info:hdl:2441/1op860fg2l8f4p3acvk2hj0tmn is not listed on IDEAS
    19. Bougette, Patrice & Deschamps, Marc & Marty, Frã‰Dã‰Ric, 2015. "When Economics Met Antitrust: The Second Chicago School and the Economization of Antitrust Law," Enterprise & Society, Cambridge University Press, vol. 16(2), pages 313-353, June.
    20. van Damme, E.E.C., 2004. "Pragmatic Privatization : The Netherlands 1982-2002," Discussion Paper 2004-007, Tilburg University, Tilburg Law and Economic Center.
    21. Howell, Bronwyn, 2008. "The End or the Means? The Pursuit of Competition in Regulated Telecommunications Markets," Working Paper Series 19103, Victoria University of Wellington, The New Zealand Institute for the Study of Competition and Regulation.

    More about this item

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ingrde:v:3:y:2024:i:1:s2949753123000632. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: https://www.journals.elsevier.com/innovation-and-green-development .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.