Liberalization of network industries frequently separates the network from the other parts of the industry. This is important in particular for the electricity industry where private firms invest into generation facilities, while net- work investments usually are controlled by regulators. We...

The decision to provide services of general interest by public or private enterprises has to be based on the following key issue: should one refer to these services as public goods? This question cannot be answered generally but has to be addressed on a case-tocase basis. Although there are some...

We study an industry with a monopolistic bottleneck (e.g. a transmission network) supplying an essential input to several downstream firms. Under legal unbundling the bottleneck must be operated by a legally independent upstream firm, which may be partly or fully owned by an incumbent active in...

While humans often care about sunk investment, animals are not subject to this sort of sunk cost behavior or “Concorde fallacy”. This paper investigates a simple two stage decision problem under uncertainty. At the second stage, subjects can commit the Concorde fallacy by sticking to the...

Prices may di er between regional markets if transport capacities are limited. We develop a new approach to determine to which extent such di erences stem from limited participation in cross-border trader rather than from bottlenecks. We derive a theoretical integration benchmark for the typical...

Linear demand formulations for price competition in horizontally differentiated products are sometimes used to compare situations where additional varieties become available, e. g. due to market entry of new firms. We derive a consistent demand system to analyze such situations.

Ramsey-Boiteux prices and monopoly prices are frequently regarded as being similar. This might suggest that sometimes monopoly pricing is close to the Ramsey-Boiteux second best and welfare superior to imperfectly regulated prices. This paper tries to specify what is meant by “being...

Competition between parallel infrastructures incorporates opposing welfare effects. The gain from reduced deadweight loss might be outweighed by the inefficient duplication of an existing infrastructure. Using data from broadband Internet access for western Europe 2000-04, this paper...

A fully unbundled, regulated network fi?rm of unknown efficiency level can undertake unobservable effort to increase the likelihood of low downstream prices, e.g., by facilitating downstream competition. To incentivize such effort, the regulator can use an incentive scheme paying transfers to...