Competition on the Telecommunications Market Under Asymmetric Access to Infrastructure
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Publication date: 2008-06-30
GNPJE 2008;224(5-6):47-69
The article examines the behavior of businesses on a market where market players have limited access to infrastructure. The purpose of the article is to identify and assess the behavior of businesses that are forced to make strategic decisions under such circumstances. The analysis is based on a static model of monopolistic competition in which a company leasing infrastructure to other businesses plays the role of market leader, while the remaining entities are described as “followers.” The author looks at fees charged for the rental of infrastructure in the context of the followers’ fixed costs. The analysis reveals a strong link between the form of payment and the level of production. Market players benefit when leasing fees are imposed on a lump-sum basis, which leads to lower prices and a more favorable structure of the market, Dziewulski says.
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