Empirical Evaluation of Regulatory Regimes in Local Telecommunications Markets

Gasmi, Farid, Laffont, Jean-Jacques and Sharkey, William W. (1999) Empirical Evaluation of Regulatory Regimes in Local Telecommunications Markets. Journal of Economics and Management Strategy, 8 (1). pp. 61-93.

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Official URL: http://tse-fr.eu/pub/1065

Abstract

This paper relies on an engineering optimization model of the local telecommunication exchange network to calibrate the functions entering various regulatory mechanisms, from both traditional and modern (incentive) regulation, and evaluate their relative performance. The engineering process model is used to generate data, which are econometrically synthesized in a translog economic cost function. Using this estimated cost function and some empirical and institutional information on market and regulatory conditions, we then calibrate demand, social-surplus, and disutility-of-(cost-reducing)-effort functions. These functions, together with probability distributions reflecting the regulator's beliefs about technology characteristics, allow us to quantitatively assess the social value of regulatory transfers and of good cost auditing procedures, the redistributive consequences of the various forms of regulation, and the sensitivity of their relative performance to the cost of public funds.

Item Type: Article
Language: English
Date: 1999
Refereed: Yes
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 18 Jan 2012 05:55
Last Modified: 07 Mar 2018 13:21
OAI ID: oai:tse-fr.eu:1065
URI: http://publications.ut-capitole.fr/id/eprint/2531

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