Access to Bottleneck Inputs under Oligopoly: A Prisoners' Dilemma?

C-Tier
Journal: Southern Economic Journal
Year: 2010
Volume: 76
Issue: 3
Pages: 660-677

Score contribution per author:

0.503 = (α=2.01 / 2 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We analyze the incentives of vertically integrated oligopolists to concede access to their bottleneck inputs to an entrant in the downstream market. First, two vertically integrated incumbents make access price offers to an entrant that chooses which one to accept, if any. Second, firms compete on Salop's circle. The firms may be asymmetrically located on the circle, to reflect differences in consumer shares. For some levels of asymmetry, the incumbents face a prisoners' dilemma with respect to conceding access to their bottleneck inputs. Entry by a downstream firm may lead to lower retail prices. However, entry may also lead to higher retail prices for the access provider and for the entrant. We also consider the cases where there are several incumbents and where the entrant makes the access price offers.

Technical Details

RePEc Handle
repec:wly:soecon:v:76:y:2010:i:3:p:660-677
Journal Field
General
Author Count
2
Added to Database
2026-01-24