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Price-Cap Regulation of Firms That Supply Their Rivals

Soo Jin Kim et al.

The Review of Network Economics2024https://doi.org/10.1515/rne-2024-0003article
AJG 2ABDC B
Weight
0.30

What the paper says

Abstract We study price-cap regulation in a market in which a vertically integrated upstream monopolist sells an essential input to a downstream competitor. In the absence of regulation, entry benefits both firms, but may harm downstream consumers because the upstream monopolist can set a high input price that would push downstream prices above the unregulated monopoly level. However, if a regulator caps the incumbent’s upstream and downstream prices, consumers and firms are better off after entry than under a price-cap monopoly. We extend our model to examine the concern that price caps may induce incumbents to forgo cost-reducing investments and dampen entrants’ incentives to self-provision the input.

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https://doi.org/https://doi.org/10.1515/rne-2024-0003

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@article{soo2024,
  title        = {{Price-Cap Regulation of Firms That Supply Their Rivals}},
  author       = {Soo Jin Kim et al.},
  journal      = {The Review of Network Economics},
  year         = {2024},
  doi          = {https://doi.org/https://doi.org/10.1515/rne-2024-0003},
}

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Price-Cap Regulation of Firms That Supply Their Rivals

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Evidence weight

0.30

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.00 × 0.4 = 0.00
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.