Liberalisation, competition and ownership in the presence of vertical relations

Johan Willner*

*Corresponding author for this work

    Research output: Contribution to journalArticleScientificpeer-review

    6 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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