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- W2894575063 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 be detrimental to downstream consumers because the upstream monopolist can set a high input price that will push downstream prices above the monopoly level. However, if a regulator caps the incumbent's upstream and downstream prices, consumers and firms benefit from entry. Using a dynamic extension of the model, we explore the concern that price caps may induce incumbents to forgo cost-reducing investments and dampen entrants' incentives to self-provision the input." @default.
- W2894575063 created "2018-10-12" @default.
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- W2894575063 date "2017-08-07" @default.
- W2894575063 modified "2023-09-24" @default.
- W2894575063 title "Price-Cap Regulation of Firms that Supply Their Rivals" @default.
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