Progressive entry and the incentives to invest in alternative infrastructuresReportar como inadecuado

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1 Télécom ParisTech 2 CREST - Centre de Recherche en Économie et Statistique 3 Economie industrielle et économie comportementale CREM - Centre de Recherche en Economie et Management

Abstract : In this paper we study an entrant-s incentives to build a network infrastructure, when there is an initial phase of service-based competition where it leases access to the incumbent-s infrastructure. We build a model in which the phase of service-based competition allows the entrant to step into the market by progressively acquiring market experience. We show that the acquisition of experience in the phase of service-based competition delays the entrant-s investment when the prospects for infrastructure investment are good, and accelerates investment otherwise. We also show that when the acquisition of experience depends on the entrant-s current customer base and facility-based entry is a long-term possibility, setting a low access price can accelerate the entrant-s investment.

Keywords : Entry Infrastructure investment Access pricing Telecommunications

Autor: Marc Bourreau - Joeffrey Drouard -



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