Reference : Price Competition under Universal Service Obligations
Scientific congresses and symposiums : Unpublished conference/Abstract
Business & economic sciences : Microeconomics
Price Competition under Universal Service Obligations
Gautier, Axel[Université de Liège - ULg > HEC-Ecole de gestion de l'ULg : UER > Economie industrielle >]
37th EARIE Conference
[en] In industries like telecom, postal services or energy provision, universal service obligations (uniform price and universal coverage) are often imposed on one market participant. Universal service obligations are likely to alter firms' strategic behavior in such competitive markets. In this paper we show that, depending on the entrant's market coverage and the degree of product differentiation, the Nash equilibrium in prices involves either pure or mixed strategies. We show that the pure strategy market sharing equilibrium, as identified by Valletti et al. (2002) defines a lower bound on the level of equilibrium prices.
Centre de Recherche en Économie Publique et de la Population - C.R.E.P.P