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Asymmetric Networks and Access Charges

Author

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  • Alexander Correa

    (Modeling for Management and Public Policy, Jorge Tadeo Lozano University, Bogotá, Colombia)

Abstract

In order to suggest an appropriate regulatory regime in the context of firm asymmetry, this study has developed a mathematical model that allows to elucidate comparisons of three different regulatory scenarios. In the unregulated market, the low-cost firm is more likely to become dominant in the market. Symmetric regulation has an immediate effect on off-net prices, which fall to the level of its marginal costs. Finally, asymmetric regulation is a highly effective way of promoting market entry. Asymmetric regulation can generate higher social welfare.

Suggested Citation

  • Alexander Correa, 2019. "Asymmetric Networks and Access Charges," Journal of International Commerce, Economics and Policy (JICEP), World Scientific Publishing Co. Pte. Ltd., vol. 10(01), pages 1-22, February.
    • Handle: RePEc:wsi:jicepx:v:10:y:2019:i:01:n:s1793993319500054
    DOI: 10.1142/S1793993319500054
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    References listed on IDEAS

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