Browse > Article
http://dx.doi.org/10.15266/KEREA.2020.29.1.047

Competition Policy and Open Access to Essential Facilities in Natural Gas Market  

Heo, Eun Jeong (Department of Economics, Sungkyunkwan University)
Cho, Myeonghwan (Department of Economics, University of Seoul)
Publication Information
Environmental and Resource Economics Review / v.29, no.1, 2020 , pp. 47-89 More about this Journal
Abstract
We introduce a simple theoretical model to analyze the welfare impact of a competition policy in the natural gas market in South Korea. An incumbent monopolistic firm currently owns essential facilities, but the competition policy mandates that the firm provide open access to any entrant firm, charging an access fee. When no regulation is imposed on the fee pricing, this policy increases social welfare as well as the profit of the incumbent firm. When the pricing is regulated, however, social welfare depends on whether there is information asymmetry between the government and the firm regarding the operating cost of the facilities. If the government has complete information, social welfare can be maximized by choosing the optimal prices. Otherwise, the government has to set the prices based on the information that the firm delivers. We formulate a Bayesian game to analyze this case and identify a set of perfect Bayesian equilibria to compare social welfare.
Keywords
Natural gas market; Essential facilities; Market power; Price regulation; Asymmetric information;
Citations & Related Records
연도 인용수 순위
  • Reference
1 강재성. 서정규. 도현재, 가스설비 접속요금 결정 방안에 관한 연구, 에너지경제연구원, 2002.
2 김대욱. 김종호, 가스산업 시장분석, 공정거래위원회, 2014.
3 김희수. 김형찬. 변정욱. 곽정호. 오기환, 시장지배적 사업자의 필수설비 규제에 대한 법경제학적 접근, 정보통신정책연구원, 2001.
4 도현재. 서정규, 가스산업의 진입장벽 완화와 경쟁정책, 에너지경제연구원, 2006.
5 에너지경제연구원, 에너지통계연보, 각년도.
6 이상림. 서정규. 이호무. 정연제. 장현국, LNG 직수입 확대에 따른 전력시장 등 제도개편 방안 연구, 에너지경제연구원, 2018.
7 이종화. 변정욱. 오기석, 필수설비 규제에 대한 해외동향 및 시사점, 정보통신정책연구원, 2003.
8 최충규, 네트워크산업에서의 접속차별 유인에 관한 연구, 한국경제연구원, 2003.
9 Chen, Z., "Dominant retailers and the countervailing-power hypothesis," RAND Journal of Economics, Vol. 34, No. 4, 2003, pp. 612-625.   DOI
10 Cho, M., "Externality and information asymmetry in the production of local public goods," International Journal of Economic Theory, Vol. 9, No. 2, 2013, pp. 177-201.
11 Cho, M., "Investor's information sharing with firms in oligopoly," Korean Economic Review, Vol. 35, No. 2, 2019, pp. 439-469.   DOI
12 Crawford, V. P. and J. Sobel, "Strategic information transmission," Econometrica, Vol. 50, No. 6, 1982, pp. 431-1451.
13 Dobson, P. W. and M. Waterson, "Countervailing power and consumer prices," The Economic Journal, Vol. 107, No. 441, 1997, pp. 418-430.   DOI
14 Erutku, C., "Buying power and strategic interactions," Canadian Journal of Economics, Vol. 38, No. 4, 2005, pp. 1160-1172.   DOI
15 Farrell, J. and R. Gibbons, "Cheap talk with two audiences," American Economic Review, Vol. 79, No. 5, 1989, pp. 1214-1223.
16 Goltsman, M. and G. Pavlov, "How to talk to multiple audiences," Games and Economic Behavior, Vol. 72, No. 1, 2011, pp. 100-122.   DOI
17 Melumad, N. D. and T. Shibano, "Communication in settings with no transfers," RAND Journal of Economics, Vol. 22, No. 2, 1991, pp. 173-198.   DOI
18 Osborne, M. J. and A. Rubinstein, A Course in Game Theory. MIT Press, 1994.
19 von Ungern-Sternberg, T., "Countervailing power revisited," International Journal of Industrial Organization, Vol. 14, No. 4, 1996, pp. 507-519.   DOI
20 Weisman, D. L., "Regulation and the vertically integrated firm: the case of RBOC entry into Interlata long distance," Journal of Regulatory Economics, Vol. 8, No. 3, 1995, pp. 249-266.   DOI