@article{ART001461056},
author={Namhoon Kwon},
title={Regulatory Holidays vs. Guaranteed Risk Premium: Comparing Measures to Balance Returns on Essential Facilities Investments},
journal={Journal of Regulation Studies},
issn={1738-7132},
year={2010},
volume={19},
number={1},
pages={69-97}
TY - JOUR
AU - Namhoon Kwon
TI - Regulatory Holidays vs. Guaranteed Risk Premium: Comparing Measures to Balance Returns on Essential Facilities Investments
JO - Journal of Regulation Studies
PY - 2010
VL - 19
IS - 1
PB - 한국규제학회
SP - 69
EP - 97
SN - 1738-7132
AB - Expecting heavy regulations on essential facilities ex post, firms may avoid or delay socially beneficial investment projects on infrastructure. For example, although the prospect for next generation network (NGN) has been blooming for quite a while, regulators in many countries have had difficult times to persuade operators to invest in fiber optic access networks. It has been proposed that the investment risks faced by operators should be reduced by exempting newly deployed networks from access regulation, awarding “regulatory holidays” to operators. However, those who oppose to this idea claim that there is no need for allowing monopoly exploitation, because the same goal can be achieved by allowing constant risk premium under regulation. In this paper, I survey the recent debate on this issue and devise a simple theoretical model to compare two approaches. It is shown that, while constant risk premium approach is generally better in terms of maximizing social welfare, there are some cases in which regulatory holidays is optimal.
KW - essential facilities;returns on investment;regulatory holidays;optimal regulation
DO -
UR -
ER -
Namhoon Kwon. (2010). Regulatory Holidays vs. Guaranteed Risk Premium: Comparing Measures to Balance Returns on Essential Facilities Investments. Journal of Regulation Studies, 19(1), 69-97.
Namhoon Kwon. 2010, "Regulatory Holidays vs. Guaranteed Risk Premium: Comparing Measures to Balance Returns on Essential Facilities Investments", Journal of Regulation Studies, vol.19, no.1 pp.69-97.
Namhoon Kwon "Regulatory Holidays vs. Guaranteed Risk Premium: Comparing Measures to Balance Returns on Essential Facilities Investments" Journal of Regulation Studies 19.1 pp.69-97 (2010) : 69.
Namhoon Kwon. Regulatory Holidays vs. Guaranteed Risk Premium: Comparing Measures to Balance Returns on Essential Facilities Investments. 2010; 19(1), 69-97.
Namhoon Kwon. "Regulatory Holidays vs. Guaranteed Risk Premium: Comparing Measures to Balance Returns on Essential Facilities Investments" Journal of Regulation Studies 19, no.1 (2010) : 69-97.
Namhoon Kwon. Regulatory Holidays vs. Guaranteed Risk Premium: Comparing Measures to Balance Returns on Essential Facilities Investments. Journal of Regulation Studies, 19(1), 69-97.
Namhoon Kwon. Regulatory Holidays vs. Guaranteed Risk Premium: Comparing Measures to Balance Returns on Essential Facilities Investments. Journal of Regulation Studies. 2010; 19(1) 69-97.
Namhoon Kwon. Regulatory Holidays vs. Guaranteed Risk Premium: Comparing Measures to Balance Returns on Essential Facilities Investments. 2010; 19(1), 69-97.
Namhoon Kwon. "Regulatory Holidays vs. Guaranteed Risk Premium: Comparing Measures to Balance Returns on Essential Facilities Investments" Journal of Regulation Studies 19, no.1 (2010) : 69-97.