According to the new European telecom regulation, incumbent operators are required to provide access to such bottlenecks on fair, reasonable and non-discriminatory terms. We explore different interpretations of this general rule in a model in which the bottleneck can be used by external (to the...

The purpose of this article is to investigate the prospects for entry into an existing network in the telecommunication industry, and how public policy may promote a more competitive outcome. We apply a model that captures the fact that the incumbent has an installed base of loyal consumers,...

We examine the optimal regulation of agricultural markets when farmers have organized their activity in a cooperative which is the monopoly supplier of an upstream product and which competes with a single rival firm in selling a homogenous downstream product. The rival's marginal cost is private...

System reliability is a key aspect of electricity supply, and the ability to maintain system reliability thus is an important aspect of a liberalised electricity market. But system reliability can be ensured only if there is sufficient reserve capacity at all times. In a liberalised electricity...

We present a model of optimal contracting between a purchaser and a provider of health services when quality has two dimensions. We assume that one dimension of quality is veri?able (dimension 1) and one dimension is not verifiable (dimension 2). We show that the power of the incentive scheme...

In a non-cooperative oligopoly model where firms use simple linear prices, Klemperer (1987) has shown that the existence of consumers’ switching costs may generate monopoly like prices, and thereby create substantial loss in welfare. We show that when allowing firms to use two-part tariffs,...

The general opinion among power industry representatives and electricity market analysts is that the Nordic electricity market has worked well. The purpose of this paper is to explore why the Nordic electricity market has performed well and to consider to what extent the Nordic experiences are...

We study the relationship between regulatory regimes and pharmaceutical firms’ pricing strategies using a unique policy experiment from Norway, which in 2003 introduced a reference price (RP) system called “index pricing” for a sub-sample of off-patent pharmaceuticals, replacing the...

We consider a therapeutic market with potentially three pharmaceutical firms. Two of the firms offer horizontally differentiated brand-name drugs. One of the brand-name drugs is a new treatment under patent protection that will be introduced, if the profits are sufficient to cover the entry...

This paper studies measurement of welfare e¤ects, transient and permanent, of stabilizing or deregulating prices in Cobweb-like settings. As in Cobweb-models, producers must commit inputs in face of uncertainty. Here, however, we consider producers who are concerned with adaptations of inputs...