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
Rok vydání:	2008
Předmět:	Competition (economics) Microeconomics Economics and Econometrics media_common.quotation_subject Network service Economics Quality (business) Subsidy Cournot competition Investment (macroeconomics) Domestic market Network effect media_common
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
Externí odkaz:	https://explore.openaire.eu/search/publication?articleId=doi_________::a577ea58020a8c9f90846bf0ae31be0e https://doi.org/10.1111/j.1468-5876.2007.00408.x Zobrazit plný text záznamu Full text from SpringerLink Plný text