Deregulation redux: does mandating access to bottleneck facilities necessarily improve welfare?
نویسندگان
چکیده
We demonstrate that deregulation in the form of vertical separation of network components into natural monopoly and potentially competitive markets does not truly represent a lessening of regulatory burdens. That is, vertical separation is not synonymous with deregulation; “more competitors” is not equivalent to “more competition”. We assume a public interest regulator that is constrained to set a unit price that maximizes expected welfare subject to a break-even constraint. We show that under both symmetric and asymmetric information cases the information demands on the regulator of the vertically integrated system are no greater than those in the case of vertical separation.
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