Proactive price regulation for upgrading telecommunications infrastructure

Qiong Wang, Jon M. Peha

Research output: Contribution to journalArticlepeer-review

Abstract

The extent to which society benefits from an upgrade to a telecommunications network infrastructure depends on when that upgrade occurs. This paper discusses a proactive pricing approach in which the regulator defines a pricing policy to induce a profit-seeking monopoly carrier to upgrade the infrastructure at the socially desirable time. We discuss how the regulator can determine the optimal time to upgrade the infrastructure and specify a proactive pricing policy to induce that timing. We also demonstrate a tradeoff between promoting social efficiency and protecting consumer interests in applying that approach.

Original languageEnglish (US)
Pages (from-to)161-176
Number of pages16
JournalInformation Economics and Policy
Volume9
Issue number2 SPEC. ISS.
DOIs
StatePublished - Jun 1997
Externally publishedYes

Keywords

  • Infrastructure
  • Monopoly
  • Pricing
  • Regulation
  • Telecommunications

ASJC Scopus subject areas

  • Economics and Econometrics
  • Management, Monitoring, Policy and Law

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