Durchleitungsexternalitäten der gemeinsamen Netznutzung in der Trinkwasserversorgung

This paper highlights the following unique characteristic of the piped water market: Consider two firms that supply different water qualities into the same net. The mixed water quality of both firms defines the fixed costs of the net. These costs decrease with a higher water quality. Our model uses monopoly and Cournot duopoly to examine the effects of increasing competition in the water market with common carriage. We show under the assumptions of our model that increasing competition decreases prices, lowers the water quality and increases welfare surplus. Nevertheless a decrease in the water quality does not imply that deregulation of the water market is impossible. Even if the water quality is held exogenously constant increasing competition leads to an increase in welfare.