Working Paper: CEPR ID: DP9376
Authors: Marc Bourreau; Carlo Cambini; Steffen Hoernig
Abstract: We investigate cooperative investment for the deployment of a new infrastructure, and how it interacts with access obligations and demand uncertainty. Co-investment increases total coverage only if service differentiation and/or cost savings from joint investment, in particular due to high uncertainty, are high. Mandated access reduces incentives for co-investment not only through lower returns but also by the existence of the access option itself. Voluntary access provision increases infrastructure coverage but reduces social welfare by softening competition.
Keywords: access obligations; coinvestment; networks; uncertainty
JEL Codes: D21; D43; G31; L5; L96
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| co-investment (G31) | increased infrastructure coverage (H54) |
| mandated access (L96) | reduced incentives for co-investment (G31) |
| voluntary access provision (H42) | increased infrastructure coverage (H54) |
| voluntary access provision (H42) | reduced social welfare (I38) |