Liberalisation, competition and ownership in the presence of vertical relations

Johan Willner*

*Corresponding author for this work

Research output: Contribution to journalArticleScientificpeer-review

3 Citations (Scopus)

Abstract

This contribution analyses a market with an upstream bottleneck monopoly and a downstream activity that may either be vertically integrated or separated. Separation always reduces the consumer surplus, and the total surplus unless there are large cost reductions. Downstream competition from a public or private network monopoly would crowd out other firms, also when public ownership is associated with more modest objectives than welfare-maximisation. A market is therefore less likely to remain a mixed oligopoly than without vertical relations. However, private firms would survive in a moderately welfare-improving mixed oligopoly with cross-subsidisation and access charges equal to marginal costs.

Original languageEnglish
Pages (from-to)449-464
Number of pages16
JournalEmpirica
Volume35
Issue number5
DOIs
Publication statusPublished - 2008
MoE publication typeA1 Journal article-refereed

Keywords

  • Liberalisation
  • Mixedoligopoly
  • Privatisation
  • Vertical separation

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