Archivio Istituzionale della RicercaWe study the impact of reciprocal access charges on the incentives to invest in networks of higher quality. We show how private and social preferences always diverge once investments are endogenized. Private negotiations never lead to charges being set at their marginal cost. Whether or not marginal cost charges have good dynamic properties depends on the way investments in quality impact on traffic generated on the networks.
Access Charge and Quality Choice in Competing Networks / Cambini, Carlo; Valletti, T.. - In: INFORMATION ECONOMICS AND POLICY. - ISSN 0167-6245. - 16:(2004), pp. 391-409. [10.1016/j.infoecopol.2004.01.007]
Access Charge and Quality Choice in Competing Networks
CAMBINI, CARLO;
2004
Abstract
We study the impact of reciprocal access charges on the incentives to invest in networks of higher quality. We show how private and social preferences always diverge once investments are endogenized. Private negotiations never lead to charges being set at their marginal cost. Whether or not marginal cost charges have good dynamic properties depends on the way investments in quality impact on traffic generated on the networks.
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https://hdl.handle.net/11583/1398253
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