Publication Date:
2016-01-01
Description:
Several regulatory authorities have recently allowed competing network operators to co-invest in network infrastructure. With the use of a laboratory experiment, we investigate the impact of co-investments on competition in regulated network industries, particularly in comparison to unilateral and duplicate investments. Our main finding is that co-investment (i.e. cooperation at the infrastructure level) facilitates tacit collusion (i.e. cooperation at the retail level) significantly, which questions the positive evaluation of co-investments with respect to consumers’ surplus in the theoretical literature.
Print ISSN:
2194-5993
Electronic ISSN:
1446-9022
Topics:
Economics
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