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The theoretical financial model of access pricing

Author

Listed:
  • Chun‐Hung Chen
  • Ting‐Kun Liu

Abstract

Purpose - This paper aims to explore the three basic roles that access price plays: the collection of opportunity cost; the redistribution of profit; and the tools of exploiting competitors. Design/methodology/approach - The paper uses the efficient component pricing rule. Findings - According to the model constructed in this paper, it is found that, unless the basic commodities are the substitutes (independent) for combined goods, the opportunity cost arising from the access process is not necessarily positive. Besides, this analysis reveals that among the combined access prices there exist certain crowding‐out effects. Social implications - This paper finds that the access commodities' collusion equilibrium does not exist. Originality/value - This paper adopts a more generalized set‐up to analyze the problem of access pricing. Besides, since the collection of opportunity cost is the most common and reasonable explanation for the existence of access pricing, this study conducts further analysis on this topic.

Suggested Citation

  • Chun‐Hung Chen & Ting‐Kun Liu, 2011. "The theoretical financial model of access pricing," Journal of Economic Studies, Emerald Group Publishing Limited, vol. 38(5), pages 537-545, September.
    • Handle: RePEc:eme:jespps:v:38:y:2011:i:5:p:537-545
    DOI: 10.1108/01443581111161805
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