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A platform for research: civil engineering, architecture and urbanism
Network interconnectivity with competition and regulation
Highlights ► We model a simple theoretical transport network. ► We investigate the problem of network interconnection. ► Welfare maximisation, network monopoly and entry regimes are compared. ► (Potential) Entry can be used to bring about the society’s preferred level of interconnection.
Abstract A simple theoretical network model is introduced to investigate the problem of network interconnection. Prices, profits and welfare are compared under welfare maximisation, network monopoly and a scenario with competition over one part of the network. Given that inducing actual competition may bring disbenefits such as cost duplication and co-ordination costs, we also explore the possibility of a regulator using the threat of entry on a section of the monopoly network in order to bring about the socially preferred level of interconnectivity. We show that there are feasible parameter values for which such a threat is plausible.
Network interconnectivity with competition and regulation
Highlights ► We model a simple theoretical transport network. ► We investigate the problem of network interconnection. ► Welfare maximisation, network monopoly and entry regimes are compared. ► (Potential) Entry can be used to bring about the society’s preferred level of interconnection.
Abstract A simple theoretical network model is introduced to investigate the problem of network interconnection. Prices, profits and welfare are compared under welfare maximisation, network monopoly and a scenario with competition over one part of the network. Given that inducing actual competition may bring disbenefits such as cost duplication and co-ordination costs, we also explore the possibility of a regulator using the threat of entry on a section of the monopoly network in order to bring about the socially preferred level of interconnectivity. We show that there are feasible parameter values for which such a threat is plausible.
Network interconnectivity with competition and regulation
McHardy, Jolian (author) / Reynolds, Michael (author) / Trotter, Stephen (author)
Transportation Research Part A: Policy and Practice ; 47 ; 97-110
2012-10-09
14 pages
Article (Journal)
Electronic Resource
English
Network interconnectivity with competition and regulation
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