INTERCONNECTION AGREEMENT BETWEEN INTERNET SERVICE PROVIDERS AND THE OPTIMAL POLICY INTERVENTION: THE CASE OF COURNOT-TYPE COMPETITION UNDER NETWORK EXTERNALITIES
Autor: | Ichiroh Daitoh, Hyun Soo Ji |
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Rok vydání: | 2008 |
Předmět: | |
Zdroj: | The Japanese Economic Review. 59:228-240 |
ISSN: | 1468-5876 1352-4739 |
Popis: | We derive the optimal subsidy policy for an interconnection agreement between two symmetric Internet service providers (ISPs) competing a la Cournot in a network service market. The interconnection quality agreed upon is lower than the socially optimal level, as suggested by Cremer et al. (2000). In the basic model where both ISPs compete in the domestic market, the optimal investment subsidy rate depends positively on the strength of network externalities. In the extended model where home and foreign ISPs compete in the home market, the optimal subsidy rate for the home government is higher than in the basic model. |
Databáze: | OpenAIRE |
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