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http://hdl.handle.net/2445/116588
Title: | Bottleneck co-ownership as a regulatory alternative |
Author: | Boffa, Federico Panzar, John |
Keywords: | Economies d'escala Condomini Integració vertical Economies of scale Condominiums Vertical integration |
Issue Date: | 2011 |
Publisher: | Institut d’Economia de Barcelona |
Series/Report no: | [WP E-IEB11/38] |
Abstract: | This paper proposes a regulatory mechanism for vertically related industries in which the upstream “bottleneck” segment faces significant returns to scale while other (downstream) segments may be more competitive. In the proposed mechanism, the ownership of the upstream firm is allocated to downstream firms in proportion to their shares of input purchases. This mechanism, while preserving downstream competition, partially internalizes the benefits of exploiting economies of scale resulting from an increase in downstream output. We show that this mechanism is more efficient than a disintegrated market structure in which the upstream natural monopoly bottleneck sets a price equal to average cost. |
Note: | Reproducció del document publicat a: http://www.ieb.ub.edu/2012022157/ieb/ultimes-publicacions |
It is part of: | IEB Working Paper 2011/38 |
URI: | http://hdl.handle.net/2445/116588 |
Appears in Collections: | IEB (Institut d’Economia de Barcelona) – Working Papers |
Files in This Item:
File | Description | Size | Format | |
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IEB11-38_Boffa.pdf | 527.33 kB | Adobe PDF | View/Open |
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