Studies in the Access Pricing in Regulated Industries

Research Project

Project/Area Number	13630015
Research Category	Grant-in-Aid for Scientific Research (C)
Allocation Type	Single-year Grants
Section	一般
Research Field	経済理論
Research Institution	Keio University
Principal Investigator	KAWAMATA Kunio Keio University, Dep.of Economics, Professor, 経済学部, 教授 (30051569)
Project Period (FY)	2001 – 2002
Project Status	Completed (Fiscal Year 2002)
Budget Amount *help	¥2,200,000 (Direct Cost: ¥2,200,000) Fiscal Year 2002: ¥1,000,000 (Direct Cost: ¥1,000,000) Fiscal Year 2001: ¥1,200,000 (Direct Cost: ¥1,200,000)
Keywords	access pricing / Ramsey Rule / ECPR / mark-up ratio / regulated industry / network / strategic complement / inverse elasticity / マーク・アップ率 / 戦略的補完性 / 弾力性 / 接続料金 / 過剰参入 / マック・アップ率
Research Abstract	In the paper "Cournot competition and access pricing in regulated industries" we analyzed the equilibrium of an economy where one of the producers in the final market is the monopolistic supplier of input needed by both its owner and competitors, and monopoly pricing behavior of the firm is regulated. Two major objectives of this paper are (i) to study how high should the price of the entrant's final product be compared with the marginal cost of the upstream supplier, and in relation to it, (ii) to examine Baumol-Willig efficient component pricing rule (ECPR) which states that the access charge should be set roughly by the formula : optimal access charge=direct cost of providing access+opportunity cost of providing access. The problem has been studied in various settings. We were concerned with the case where the quality of the monopolist's product may be different from the entrants'. We also studied case where entrants act as Cournot oligopolists as well as the case where they behave as price takers. We do not assume, to begin with, that profits of downstream firms are zero as most previous studies did. We discussed how our analysis relates to the known results in the literature. In the accompanying paper "On the measurement of welfare changes at second best optima" we derived formulae for the change in the welfare caused by the relaxation of the distortionary constraint of the model.