Skip to Main content Skip to Navigation
Journal articles

Progressive entry and the incentives to invest in alternative infrastructures

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.
Document type :
Journal articles
Complete list of metadatas

Cited literature [24 references]  Display  Hide  Download

https://hal-univ-rennes1.archives-ouvertes.fr/hal-01016366
Contributor : Muriel Cadieu <>
Submitted on : Monday, June 30, 2014 - 10:08:45 AM
Last modification on : Wednesday, October 14, 2020 - 1:53:16 PM
Long-term archiving on: : Tuesday, September 30, 2014 - 3:05:46 PM

File

Progressive_entry_and_the_ince...
Files produced by the author(s)

Identifiers

Citation

Marc Bourreau, Joeffrey Drouard. Progressive entry and the incentives to invest in alternative infrastructures. Journal of Regulatory Economics, Springer Verlag, 2014, 45 (3), pp.329-351. ⟨10.1007/s11149-014-9248-9⟩. ⟨hal-01016366⟩

Share

Metrics

Record views

1136

Files downloads

817