1. Equity justifications for universal service obligations
- Author
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Michel Roland, Jean-Christophe Poudou, Montpellier Recherche en Economie ( MRE ), Université de Montpellier ( UM ), Université Catholique de Louvain ( UCL ), Montpellier Recherche en Economie (MRE), Université de Montpellier (UM), Labex Entreprendre, CREATE, Centre de Recherche en économie de l'Environnement, de l'Agroalimentaire, des Transports et de l'Énergie, and Université Laval [Québec] (ULaval)
- Subjects
Economics and Econometrics ,Strategy and Management ,Economics, Econometrics and Finance (miscellaneous) ,Microeconomics ,Private equity fund ,Oligopoly ,equity ,Universal service obligations ,0502 economics and business ,Economics ,Coverage constraint ,[ SHS.ECO ] Humanities and Social Sciences/Economies and finances ,Obligation ,050207 economics ,Industrial organization ,ComputingMilieux_MISCELLANEOUS ,050205 econometrics ,Equity risk ,Uniform pricing ,JEL: L - Industrial Organization/L.L5 - Regulation and Industrial Policy/L.L5.L51 - Economics of Regulation ,05 social sciences ,Equity theory ,Equity (finance) ,regulation ,JEL: K - Law and Economics/K.K2 - Regulation and Business Law/K.K2.K23 - Regulated Industries and Administrative Law ,Price constraint ,[SHS.ECO]Humanities and Social Sciences/Economics and Finance ,coverage and price constraints ,Industrial relations ,JEL: D - Microeconomics/D.D6 - Welfare Economics/D.D6.D63 - Equity, Justice, Inequality, and Other Normative Criteria and Measurement - Abstract
International audience; Equity is often invoked as a possible justification for the imposition of universal service obligations (USOs). However, no previous analysis supports a formal link between equity and USO. In this paper, we describe the extent to which the im- position of USOs in oligopolistic network industries can meet the objectives of an inequality-averse regulator. We show that USOs can be used for equity purposes provided that the regulator is able to control the competitive structure of the industry. We also show that the uniform pricing constraint, which is an obligation to offer the same price conditions to all consumers, is welfare-enhancing but rather surprisingly, it does not necessarily improve equity.
- Published
- 2017
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