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Access to an Essential Facility: Efficient Component Pricing Rule or Unrestricted Private Property Rights

In this paper we compare the access to an essential facility in two different property rights regimes. In one of them, the owner of the facility has a full private property right. In the other, access is regulated according to the efficient component pricing rule. Proponents of the second regime claim that this rule is efficient, for it forecloses the complementary market only to inefficient producers. We prove that the two legal frameworks are equivalent if we do not consider the possibility of the transfer of the property right and that if this is allowed the efficient component pricing rule might exclude efficient suppliers.

 


Date: September 1999
Author(s): Paolo Buccirossi
Tag(s): Research Papers , Abuse of Dominance, Competition Economics, Cooperation and Vertical Agreements, Mergers, Regulation