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Publicly Available Published by De Gruyter December 3, 2010

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

Bruno Jullien, Jerome Pouyet and Wilfried Sand-Zantman

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.

Published Online: 2010-12-3

©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston

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