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Monopolistic competition in a limited orbital space

Author

Listed:
  • Sebastien Rouillon

    (Department of Economics, University of Bordeaux)

Abstract

In a context of intense competition for access to the Earth's orbit, we study a model of monopolistic competition in which satellites operators diversify the variety of satellite services. We put this in perspective with the accumulation of in-orbit fragment debris and the risk it poses for the sustainability of orbital activity. Monopolistic competition leads to a sub-optimal outcome, in terms of both the number of satellites in orbit and the range of services offered. We show that monopolistic competition results in excessive orbit congestion, when Earth's orbit carrying capacity is low and/or consumers' preference for diversity is low, and always leads to an insufficient number of satellite services being offered. However, a strong consumers' preference for service diversity, as it increases the market power of satellites operators, can mitigate congestion of the Earth's orbit.

Suggested Citation

  • Sebastien Rouillon, 2024. "Monopolistic competition in a limited orbital space," Space Economics Working Papers 02-2024, Institute for Space Economics, revised Sep 2024.
  • Handle: RePEc:bhw:wpaper:02-2024
    as

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    References listed on IDEAS

    as
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    3. Julien Guyot & Sébastien Rouillon, 2024. "Sustainable management of space activity in low Earth orbit," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 13(2), pages 188-212, April.
    4. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
    5. Nodir Adilov & Peter Alexander & Brendan Cunningham, 2015. "An Economic Analysis of Earth Orbit Pollution," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 60(1), pages 81-98, January.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Space economics; Orbital debris; Sustainability.;
    All these keywords.

    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • L9 - Industrial Organization - - Industry Studies: Transportation and Utilities
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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