Arbeitspapier
Co-Investment, Uncertainty, and Opportunism: Ex-Ante and Ex-Post Remedies
In this paper, we study the impact of co-investment by incumbents and entrants on the roll-out of network infrastructures under demand uncertainty. We show that if entrants can wait to co-invest until demand is realized, the incumbents' investment incentives are reduced and total coverage can be lower than in a benchmark with earlier co-investment. We consider two remedies to correct these distortions: (i) co-investment options purchased ex-ante by entrants from incumbents, and (ii) risk premia paid ex-post by entrants. We show that co-investment options cannot fully reestablish total coverage, while premia can do so in most cases, though at the cost of less entry. Finally, we show that an appropriate combination of ex-ante and ex-post remedies can improve welfare.
- Sprache
-
Englisch
- Erschienen in
-
Series: CESifo Working Paper ; No. 8078
- Klassifikation
-
Wirtschaft
Telecommunications
Economics of Regulation
- Thema
-
co-investment
uncertainty
opportunism
options
risk premia
- Ereignis
-
Geistige Schöpfung
- (wer)
-
Bourreau, Marc
Cambini, Carlo
Hoernig, Steffen
Vogelsang, Ingo
- Ereignis
-
Veröffentlichung
- (wer)
-
Center for Economic Studies and ifo Institute (CESifo)
- (wo)
-
Munich
- (wann)
-
2020
- Handle
- Letzte Aktualisierung
-
10.03.2025, 11:45 MEZ
Datenpartner
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ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.
Objekttyp
- Arbeitspapier
Beteiligte
- Bourreau, Marc
- Cambini, Carlo
- Hoernig, Steffen
- Vogelsang, Ingo
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2020
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