Strategic Cross-Subsidies and Vertical Integration in Opening Telecommunications Markets

Gasmi, Farid, Laffont, Jean-Jacques and Sharkey, William W. (2001) Strategic Cross-Subsidies and Vertical Integration in Opening Telecommunications Markets. Seoul Journal of Economics, 14 (3). pp. 323-350.

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Official URL: http://tse-fr.eu/pub/1064

Abstract

This paper analyzes the strategic role of cross-subsidies under vertical integration. We consider an incumbent firm which operates in a regulated market (switched telecommunications service) and a competitive market (unswitched service). Fitting cost data generated with an engineering cost proxy model to smooth functional forms, we first assess the extent of cross- subsidies due to allocation of common costs and managerial effort. We then focus on the cost incentives of the regulatory scheme in the regulated segment and identify situations where the incumbent may blockade entry in the competitive segment.

Item Type: Article
Language: English
Date: 2001
Refereed: Yes
Place of Publication: Seoul
Subjects: B- ECONOMIE ET FINANCE
B- ECONOMIE ET FINANCE > B3- Transport et Communication
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:1064
URI: http://publications.ut-capitole.fr/id/eprint/2532

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