We discuss the effects of strategic commitments and of network size in the process of setting interconnection fees across competing networks. We also discuss the importance of the principles of reciprocity and imputation of interconnection charges on market equilibria. Reciprocity means that...

We identify and analyze three distinct effects arising from potentially binding budget constraints in multi-unit ascending auctions. First, binding budgets clearly reduce the level of competition among bidders. Second, budget constraints may at the same time make it difficult to sustain...

Collusive equilibria exist in open ascending auctions with multiple objects, if the number of the bidders is sufficiently small relative to the number of objects, even with large complementarities in the buyers' utility function. The bidders collude by dividing the objects among themselves,...

We examine the effects of strategic commitments and network size on equilibrium interconnection fees set by competing local telecommunications networks. Our goal is to analyze how the regulatory rules of symmetric reciprocity and parity applied to interconnection charges affect the outcome of...

This paper evaluates the effectiveness of several pricing rules intended to promote entry into a network industry dominated by an incumbent carrier. Drawing on the work of Cournot and Hotelling, we develop a model of competition between two interconnected networks. In a symmetric equilibrium,...