Abstract
Two important factors for understanding network industries, which have played important roles in the modern economy, are bottleneck monopolies and network externalities. This paper aims to propose benchmarks for evaluating them. We conclude, firstly, that network competition is socially better than bottleneck monopolies, whereas access charge regulation is more desirable than unbundling for regulating bottlenecks; secondly, that, although the negative aspects of network externalities have been overemphasized, firms essentially have incentives for linking together when network externalities emerge.
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Ida, T. Bottleneck Monopolies and Network Externalities in Network Industries. Evolut Inst Econ Rev 1, 85–105 (2004). https://doi.org/10.14441/eier.1.85
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DOI: https://doi.org/10.14441/eier.1.85