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Costs and benefits of vertical divestiture (*).(Vertical integration facing separation)
- Article from:
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Communications & Strategies
- Article date:
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October 1, 2007
- Author:
- Cremer, Helmuth; Cremer, Jacques; De Donder, Philippe
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Copyright informationCOPYRIGHT 2007 IDATE. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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Abstract: This article discusses the tools economic theory provides for examining the implications of vertical separation in network industries. It argues that advocating vertical separation in all cases is too simplistic an answer. However, the economic profession has provided little guidance that would enable regulators to weigh the cost and benefits of different ownership and management structures in more sophisticated ways.
Key words: Vertical separation, vertical integration, economics of regulation, pipelines.
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Ten years ago, in their now classical book A Theory of Incentives in Procurement and Regulation, Jean-Jacques LAFFONT & Jean TIROLE wrote: ...