- Long live OPTA!
- Number of pages
- Amsterdam: Department of Economics
- METEOR Research Memorandum
- Document type
- Working paper
- Faculty of Economics and Business (FEB)
- Amsterdam School of Economics Research Institute (ASE-RI)
Although explicitly installed as a provisional body, the Dutch telecommunication controller OPTA displays some signs typical of government institutions that seek to become indispensable. A conflict in OPTA's two main policy objectives---guarding consumer prices through controlling the network operator and encouraging entry into the telecommunication market in order to establish symmetric competition---hinders OPTA in making itself redundant. In this paper it is shown that a market structure with a dominant owner of the network and a few fringe firms, among which OPTA referees for ever, is a stable Nash equilibrium. Apart from a warning for this undesirable state of affairs, some possible remedies are discussed. Long live OPTA, but leaner and meaner, supervising a symmetrically competing market.
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