nep-net New Economics Papers
on Network Economics
Issue of 2006‒04‒08
five papers chosen by
Yi-Nung Yang
Chung Yuan Christian University

  1. On-Net and Off-Net Pricing on Asymmetric Telecommunications Networks By Hoernig, Steffen
  2. Political Parties and Network Formation By Topi Miettinen; Panu Poutvaara
  3. The relationship between regulation and competition policy for network utilities By David Newbery
  4. Associations` Agreement and the Interest of the Network Suppliers - The Strategic Use of Structural Features By Thomas Wein
  5. Predicción y modelización económica: la importancia de las redes de investigación. By PULIDO, ANTONIO; López García, Ana María

  1. By: Hoernig, Steffen
    Abstract: The differential between on-net and off-net prices, for example on mobile telephony networks, is an issue that is hotly debated between telecoms operators and regulators. Small operators contend that their competitors' high off-net prices are anticompetitive. We show that if the utility of receiving calls is taken into account, the equilibrium pricing structures will indeed depend on firms' market shares. Larger firms will charge higher off-net prices even without anticompetitive intent, both under linear and two-part tariffs. Predative behavior would be accompanied by even larger on-net / off-net differentials even if access charges are set at cost.
    Keywords: asymmetry; call externality; on/off-net pricing; telecommunications network competition
    JEL: L51
    Date: 2006–03
  2. By: Topi Miettinen; Panu Poutvaara
    Abstract: We argue that anticorruption laws may provide an efficiency rationale for why political parties should meddle in the distribution of political nominations and government contracts. Anticorruption laws forbid trade in spoils that politicians distribute. However, citizens may pay for gaining access to politicians and, thereby, to become potential candidates for nominations. Such rent-seeking results in excessive network formation. Political parties may reduce wasteful network formation, thanks to their ability to enter into exclusive membership contracts. This holds even though anticorruption laws also bind political parties.
    Keywords: political parties, two-sided platforms, rent-seeking, network formation
    JEL: D72 D85 L14
    Date: 2006
  3. By: David Newbery
    Abstract: Should regulation of potentially competitive elements of network utilities be left with sector regulators or solely subject to normal competition laws? Britain evolved licenses for network activities overseen by regulators while the EU places more emphasis on making sector regulation consistent with competition law. The paper discusses the appropriateness of the competition law approach for telecoms and electricity. Post-modern utilities like telecoms, in which facilities-based competition is possible, lend themselves to the approach laid out in the Communications Directives, and its application to mobile call termination is discussed. Electricity, where collective dominance is more likely, does not fit comfortably into this approach. Instead, licence conditions retain advantages where it may be necessary to modify market rules in a timely and well-informed manner, as exemplified by the English Electricity Pool.
    Keywords: Regulation, competition policy, telecommunications, electricity, market power
    JEL: G18 L94 L96
    Date: 2006–02
  4. By: Thomas Wein (Institute of Economics, University of Lüneburg)
    Abstract: The EU electricity directive (96/92/EC) established the right of the member states to choose between Regulated and Negotiated Third Party Access (RTPA and NTPA). The interest group theory is able to explain whether the introduction of NTPA in Germany had been an interest group equilibrium under the restriction of EU-directive. Using the NTPA associations of electricity power suppliers, network monopolists and industrial consumers negotiated three agreements. The last one (AA VVII+) in December 2001 introduced a market comparison scheme with three structural features: “East-/West-Germany”, “consumption/population density”, and “cable rate”. These features are variables which are supposed to reflect cost differences between network suppliers. The theoretical analysis will derive the hypothesis that this conception allows to introduce a cost irrelevant factor and therefore to increase prices without harming firms which do not hold this factor. This hypothesis could be tested by analyzing the German low and medium voltage network suppliers in 2002 and 2003. Our estimations show that the use of structural feature “East-/West Germany” and “consumption/population density” could be explained by this hypothesis. But because we have no firm specific information about cost differences other explanations could not be excluded: Monopoly prices differ with marginal costs, and regulation could reflect real cost differences. The third structural feature “cable rate” has no influence in low voltage networks, but has an impact on access charges levied in medium voltage networks. This relationship is only given if we use the borderlines given by AA VVII+. Hence, we are not able to reject the interest group theory: The feature “cable rate” was introduced successfully to increase access charges for medium network suppliers which have high cable rates without having higher costs.
    Keywords: deregulation, natural monopoly, interest groups
    JEL: D42 L43 L94
    Date: 2005–03
  5. By: PULIDO, ANTONIO (Instituto "L.R.Klein"- Centro Stone); López García, Ana María (Instituto "L.R.Klein"- Centro Stone)
    Abstract: Existen multitud de delimitaciones terminológicas de la palabra “redes”, en función del punto de vista teórico adoptado y de la posición científica. Realizamos un recorrido por las distintas variantes de redes, para centrarnos en las redes de investigación, especialmente en las relacionadas con la difusión de la información estadística y con la modelización económica. Las nuevas tecnologías de la información y comunicaciones (TIC) facilitan el uso de las redes de información. Para productores y utilizadores de datos se abren nuevos retos y oportunidades. De igual forma, en el campo concreto de la economía asistimos a un desarrollo de las redes de investigación, integradas por equipos virtuales, con distinta ubicación espacial cuya conexión y comunicación se establece de forma preferente por medio de las TIC. Se revisan algunas experiencias nacionales e internacionales de elaboración, difusión y uso compartido a través de redes. En particular, se valoran las experiencias de tres redes de investigación especializadas en predicción y modelización económica: LINK, EUREN e HISPALINK, de ámbito internacional, europeo y nacional (España), respectivamente. This paper aims to provide a brief review of different meanings of the word “network” which depend on the theoretical point of view. We are specially interested in research networks related to statistical information and economic modelling. Nowadays, information and communications technologies (ICT) provides a lot of opportunities to establish virtual teams as members of research networks. We focus our attention in three research networks specialized in economic modelling and forecasting: LINK, EUREN and HISPALINK seen from a worldwide, european and regional perspective, respectively.
    Keywords: information networks; investigation networks; virtual teams; research networks; modeling
    JEL: L14 L16 P45
    Date: 2004–11

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