The theoretical financial model of access pricing

Abstract

Purpose

This paper aims to explore the three basic roles that access price plays: the collection of opportunity cost; the redistribution of profit; and the tools of exploiting competitors.

Design/methodology/approach

The paper uses the efficient component pricing rule.

Findings

According to the model constructed in this paper, it is found that, unless the basic commodities are the substitutes (independent) for combined goods, the opportunity cost arising from the access process is not necessarily positive. Besides, this analysis reveals that among the combined access prices there exist certain crowding‐out effects.

Social implications

This paper finds that the access commodities' collusion equilibrium does not exist.

Originality/value

This paper adopts a more generalized set‐up to analyze the problem of access pricing. Besides, since the collection of opportunity cost is the most common and reasonable explanation for the existence of access pricing, this study conducts further analysis on this topic.

Citation

Chen, C. and Liu, T. (2011), "The theoretical financial model of access pricing", Journal of Economic Studies, Vol. 38 No. 5, pp. 537-545. https://doi.org/10.1108/01443581111161805