Imperfect Legal Unbundling of Monopolistic Bottlenecks

Arbeitspapier

We study an industry with a monopolistic bottleneck (e.g. a transmission network) supplying an essential input to several downstream firms. Under legal unbundling the bottleneck must be operated by a legally independent upstream firm, which may be partly or fully owned by an incumbent active in downstream markets. Access prices are regulated but the upstream firm can perform non-tariff discrimination. Under perfect legal unbundling the upstream firm maximizes only own profits; with imperfections it considers to some extend also the profits of its downstream mother. We find that reducing imperfections in legal unbundling (keeping ownership fixed) generally increases total output. Increasing the incumbent's ownership share increases total output if imperfections are sufficiently small, otherwise the effects are ambiguous. Surprisingly, higher ownership shares of the downstream incumbent may sometimes lead to lower degrees of imperfections. Our analysis suggests that consumers may benefit most from legal unbundling with strong regulation and parts of ownership given to a minority outside shareholder.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Bonn Econ Discussion Papers ; No. 16/2007

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Production, Pricing, and Market Structure; Size Distribution of Firms ; Vertical Restraints; Resale Price Maintenance; Quantity Discounts ; Legal Monopolies and Regulation or Deregulation ; Economics of Regulation
• Thema: Network industries ; regulation ; vertical relations ; ownership ; corruption ; sabotage ; Vertikale Konzentration ; Lieferanten-Kunden-Beziehung ; Netzzugang ; Unternehmensentflechtung ; Monopol ; Investition ; Eigentum ; Theorie

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Höffler, Felix ; Kranz, Sebastian
• Ereignis: Veröffentlichung
• (wer): University of Bonn, Bonn Graduate School of Economics (BGSE)
• (wo): Bonn
• (wann): 2007

Weitere Informationen

• Handle: http://hdl.handle.net/10419/27157
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ