Public and Private Investments in Regulated Network Industries: Coordination and Competition Issues

This paper analyzes the relationship between a national regulator, an incumbent and a local government in a context where investment in a new network has to be undertaken. In the light of the recent debates on the competition between private firms and local governments, we analyze the limits to be p...

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Bibliographic Details
Published in:The review of network economics 2010-12, Vol.9 (4), p.21-30
Main Authors: Jullien, Bruno, Pouyet, Jerome, Sand-Zantman, Wilfried
Format: Article
Language:English
Subjects:
Asymmetric information
Economics and Finance
Humanities and Social Sciences
information
investment
Local government
Private enterprises
Private investment
Public investment
regulation
State intervention
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Summary:This paper analyzes the relationship between a national regulator, an incumbent and a local government in a context where investment in a new network has to be undertaken. In the light of the recent debates on the competition between private firms and local governments, we analyze the limits to be put on the local public intervention in these markets. We show that banning local government intervention can be welfare-enhancing either in the presence inter-districts externality or with asymmetric information or in case of conflicting objectives between the regulator and local governments.
ISSN:2194-5993
1446-9022
1446-9022
DOI:10.2202/1446-9022.1232