Date of Original Version

6-1997

Type

Article

Abstract or Description

The extent to which society benefits from an upgrade to a telecommunications network infrastructure depends on when that upgrade occurs. This paper discusses a proactive pricing approach in which the regulator defines a pricing policy to induce a profit-seeking monopoly carrier to upgrade the infrastructure at the socially desirable time. We discuss how the regulator can determine the optimal time to upgrade the infrastructure, and specify a proactive pricing policy to induce that timing. We also demonstrate a tradeoff between promoting social efficiency and protecting consumer interests in applying that approach.

DOI

10.1016/S0167-6245(97)00007-3

Included in

Engineering Commons

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Published In

Information Economics and Policy, 9, 2, 161-176.