Co-investment deterrence
We examine co-investment and access in a model of new network deployment. We show that the incumbent firm may find it optimal to deter co-investment by over-investing when the cost-sharing rule is based on its verified expenditure and the information on the deployment cost is asymmetric between the...
| Autores: | , , |
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| Tipo de recurso: | artículo |
| Estado: | Versión publicada |
| Fecha de publicación: | 2022 |
| País: | España |
| Institución: | Consejo Superior de Investigaciones Científicas (CSIC) |
| Repositorio: | DIGITAL.CSIC. Repositorio Institucional del CSIC |
| OAI Identifier: | oai:digital.csic.es:10261/269978 |
| Acceso en línea: | http://hdl.handle.net/10261/269978 |
| Access Level: | acceso abierto |
| Palabra clave: | Access Co-investment Deterrence Over-investments |
| Sumario: | We examine co-investment and access in a model of new network deployment. We show that the incumbent firm may find it optimal to deter co-investment by over-investing when the cost-sharing rule is based on its verified expenditure and the information on the deployment cost is asymmetric between the operators and the regulator. When partial deterrence is optimal, it occurs in the areas of intermediate attractiveness, consistently with the evidence found in other industries. A necessary and sufficient condition for deterrence to occur is that local industry profits are lower with than without co-investment. Results are robust to demand uncertainty. |
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