An Incentive Regulation of Access Charges under Incomplete Information 


Vol. 32,  No. 11, pp. 700-708, Nov.  2007


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  Abstract

This paper considers an incentive regulation in the telecommunications industry with respect to the sale of retail and access services. This regulation scheme induces the monopoly carrier who owns bottleneck facilities to adopt socially optimal outcomes when providing access and retail services. It is well known that upstream carriers can realize an integrated level of profit, without integration, by means of a two-part tariff. First, this paper introduces a framework for regulating an access and retail price combined with budget balancing. Second, this paper introduces two-part tariff (price discrimination) scheme for both access (upstream) and retail (downstream) services and discusses the resulting implications for incentive regulation when the regulator has incomplete information about cost functions. By imposing a self-selection mechanism, the regulator can induce firms to adopt socially optimal prices in both access and retail markets.

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  Cite this article

[IEEE Style]

C. Jung, "An Incentive Regulation of Access Charges under Incomplete Information," The Journal of Korean Institute of Communications and Information Sciences, vol. 32, no. 11, pp. 700-708, 2007. DOI: .

[ACM Style]

Choong-young Jung. 2007. An Incentive Regulation of Access Charges under Incomplete Information. The Journal of Korean Institute of Communications and Information Sciences, 32, 11, (2007), 700-708. DOI: .

[KICS Style]

Choong-young Jung, "An Incentive Regulation of Access Charges under Incomplete Information," The Journal of Korean Institute of Communications and Information Sciences, vol. 32, no. 11, pp. 700-708, 11. 2007.