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The Inefficiency of the ECPR Yet Again: A Reply to Larson

Author

Listed:
  • Nicholas Economides

    (Stern School of Business - New York University & Center for Economic Policy Research - Stanford University)

  • Lawrence J. White

    (Stern School of Business - New York University)

Abstract

We extend the results of our article, "Access and Interconnection Pricing? How Efficient Is the "Efficient Component Pricing Rule?," Antitrust Bulletin (1995). In the presence of a monopolized essential input, we show that application of the Efficient Component Pricing Rule ("ECPR") in pricing this input to downstream competitors perpetuates monopoly distortions and high prices of final goods services. We show these results for various demand conditions, including conditions that are accepted to hold in the telecommunications sector. We also respond to various criticisms raised by A. Larson in "The Efficiency of the Efficient-Component-Pricing Rule: A Comment," Antitrust Bulletin, (this issue) (1997).

Suggested Citation

  • Nicholas Economides & Lawrence J. White, 1997. "The Inefficiency of the ECPR Yet Again: A Reply to Larson," Industrial Organization 9703001, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpio:9703001
    Note: Type of Document - PDF/PostScript; prepared on IBM PC; to print on HP; pages: 19; figures: included. Forthcoming, Antitrust Bulletin, (1997)
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    Cited by:

    1. Kang Sawoong, 2011. "Mandating Wholesale Provisions with the Retail-minus Regulation in Mobile Telecommunications," Asian Journal of Law and Economics, De Gruyter, vol. 2(3), pages 1-27, October.
    2. Nicholas Economides, 1997. "The Economics of Networks," Brazilian Electronic Journal of Economics, Department of Economics, Universidade Federal de Pernambuco, vol. 1(0), December.
    3. Kaserman, David L. & Mayo, John W., 1999. "Regulatory policies toward local exchange companies under emerging competition: guardrails or speed bumps on the information highway?," Information Economics and Policy, Elsevier, vol. 11(4), pages 367-388, December.
    4. Joshy Easaw, 2000. "Network Access Regulation and Competition Policy: An Assessment of the “Direct-Plus-Opportunity Costâ€\x9D Regime and Policy Options," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 27(2), pages 133-156, June.

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    JEL classification:

    • L - Industrial Organization

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