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Network Interconnectivity with Regulation and Competition

McHardy, Jolian, Reynolds, Michael and Trotter, Stephen (2011) Network Interconnectivity with Regulation and Competition. Working Paper. Department of Economics, University of Sheffield ISSN 1749-8368


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A simple theoretical network model is introduced to investigate the problem of network interconnection. Prices, pro ts and welfare are compared under welfare maximisation, network monopoly and network monopoly with competition over one part of the network. Given that inducing actual competition may bring disbene ts such as cost duplication and co-ordination costs, we also explore the possibility of a regulator using the threat of entry on a section of the monopoly network in order to bring about the socially preferred level of interconnectivity. We show that there are feasible parameter values for which such a threat is plausible.

Item Type: Monograph (Working Paper)
Copyright, Publisher and Additional Information: The Sheffield Economics Research Paper (SERP) series offers a forum for the research output of the academic staff and research students of the Department of Economics, University of Sheffield. Papers are reviewed for quality and presentation by a departmental editor. However, the contents and opinions expressed remain the responsibility of the authors. All papers may be downloaded free on the understanding that the contents are preliminary and therefore permission from the author(s) should be sought before they are referenced.
Keywords: Network interconnectivity, monopoly, competition, regulation
Institution: The University of Sheffield
Academic Units: The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) > Sheffield Economics Research Papers Series
Depositing User: Symplectic Publications
Date Deposited: 11 Oct 2011 14:53
Last Modified: 06 Jun 2014 13:16
Published Version: http://www.shef.ac.uk/economics/research/serps/yea...
Status: Published
Publisher: Department of Economics, University of Sheffield
Identification Number: Sheffield Economic Research Paper Series 2011020
URI: http://eprints.whiterose.ac.uk/id/eprint/43330

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