This paper develops a model incorporating costly disinvestment and estimates the associated commitment premium required to invest in telecommunications. Results indicate that the irreversibility premium raises the opportunity cost of capital by 70 percent. This implies an average annual hurdle...

The primary purpose of this special issue of the Review of Network Economics is to address issues related to the dynamics of firm behavior and efficiency in network industries. A secondary purpose, where relevant, is to analyze the relationship between the nature of the regulatory regime and the...

This paper develops a model incorporating costly disinvestment and estimates the associated commitment premium required to invest in telecommunications. Results indicate that the irreversibility premium raises the opportunity cost of capital by 70 percent. This implies an average annual hurdle...