Doctor of Philosophy / Department of Economics / Dennis L. Weisman / Mandatory network unbundling is one of the foremost topics in regulatory economics today. The concept has crucial importance in the deregulation of many previously regulated industries including telecommunications, gas, electricity and railroads. Moreover, the topic has emerged as one of the more prominent issues associated with the implementation of the 1996 Telecommunication Act in the United States. Upon initial examination, establishing the correct costing standards and/or determining the correct input prices would seem important for sending the correct price signals to the entrants for their efficient make-or-buy decisions. Sappington (AER, 2005) uses a standard Hotelling location model to show that input prices are irrelevant for an entrant’s make or buy decision. In this first essay, we show that this result is closely related to the degree of product differentiation when firms are engaged in price competition. Specifically, it is shown that input prices are irrelevant when firms produce homogeneous products, but are relevant for make-or-buy decisions when the entrant and incumbent produce differentiated products. These results suggest that, in general, it is important for regulators to set correct prices in order to not distort the entrants’ efficient make-or-buy decisions. The second essay investigates optimal access charges when the downstream markets are imperfectly competitive. Optimal access charges have been examined in the literature mainly under the condition where only the incumbent has market power. However, network industries tend to exhibit an oligopolistic market structure. Therefore, the optimal access charge under imperfect competition is an important consideration when regulators determine access charges. This essay investigates some general principles for setting optimal access charges when downstream markets are imperfectly competitive. One of the primary objectives of this essay is to show the importance of the break-even constraint when first-best access charges are not feasible. Specifically, we show that when the first-best access charges are not feasible, the imposition of the break-even constraint on only the upstream profit of the incumbent is superior to the case where break-even constraint applies to overall incumbent profit, where the latter is the most commonly used constraint in the access pricing literature. Bypass and its implications for optimal access charges and welfare are also explored. The third essay is empirical in nature and investigates two primary issues, both relating to unbundled network element (UNE) prices. First, as Crandall, Ingraham, and Singer (2004) suggested, we will empirically test the stepping stone hypothesis using a state-level data set that spans multiple years. To do this, we will explore the effect of UNE prices on facilities-based entry. Second, in light of those findings, we will investigate whether the form of regulation (e.g. price cap and rate of return regulation) endogenously affects the regulator’s behavior with respect to competitive entry. Lehman and Weisman (2000) found evidence that regulators in price cap jurisdictions tend to set more liberal terms of entry in comparison with regulators in rate-of-return jurisdictions. This paper investigates whether their result is robust to various changes in modeling, including specification and econometric techniques.

L’objectif de cette thèse est d’analyser les conceptions de l’intervention publique des économistes libéraux français dans la deuxième moitié du XIXe siècle.Le premier chapitre expose leurs trois conceptions différentes de l’intervention publique. A partir de leurs analyses des attributions légitimes de l’Etat, nous proposons une typologie qui distingue une « orthodoxie » s’en tenant aux fonctions régaliennes, un libéralisme « régulateur », et un libéralisme plus « interventionniste ». Nous nous demandons si cette typologie reste pertinente quand ces économistes débattent de leurs problèmes pratiques de prédilection.Le second chapitre est ainsi consacré à l’analyse de la fiscalité par les économistes libéraux français. Cette analyse est en elle-même extrêmement riche, et nous mettons en avant, en particulier, les contributions formalisées de trois d’entre eux : Cournot, Dupuit et Fauveau.Nous étudions dans un troisième chapitre les positions de nos économistes libéraux sur l’émission, l’escompte et l’étalon monétaire. Nous montrons que leurs divergences théoriques s’expliquent par une préférence pour la règle ou pour l’intervention discrétionnaire.Le quatrième chapitre étudie la question des droits de propriété, en particulier de l’héritage et de la propriété intellectuelle. Nous faisons apparaître une opposition entre les partisans d’un Etat régulateur et ceux d’un Etat protecteur des droits naturels.Finalement, sur chacun des thèmes envisagés, il apparaît que la frontière entre « orthodoxie » et « hétérodoxie » libérales est moins figée qu’on ne pouvait le penser. / The object of this dissertation is to analyze the conceptions of public intervention in the French liberal School in the second half of the 19th century. The first chapter is devoted to the exposition of three different views of these economists on State. We elaborate a typology relying on their analyses of the legitimate State attributes; this typology distinguishes an “orthodoxy” considering the only provision of security and justice, a “regulatory” liberalism, and a more “interventionist” liberalism. We question this typology, wondering if it remains relevant when our liberal economists discuss the practical questions of their time.Thus the second chapter of our study presents to the liberal analyses of taxation. We highlight the richness of the French thought on this topic. We particularly put forward the formalized contributions of three of them: Cournot, Dupuit and Fauveau. In the third chapter we study the positions of our economists on the question of the issuing of banknotes, on credit, and on the metallic standard. We show that their theoretical divergences are well explained by their preference for a rule or for a discretionary public intervention.Our last chapter investigates the question of property rights. By examining their ideas on inheritance and on intellectual property, we emphasize the opposition inside this School between the advocates of a regulatory State and the defenders of the State as a protector of natural rights. Finally the boundary between the liberal “orthodoxy” and the liberal “heterodoxy” is less steady than what we could think.

This dissertation details regulation's impact in networked markets, notably in deregulated electricity and internet service markets. These markets represent basic infrastructure in the modern economy; their innate networked structures make for rich fields of economic research on regulatory impact. The first chapter models deregulated electricity industries with a focus on the Texas market. Optimal economic benchmarks are considered for markets with regulated delivery and interrelated network costs. Using a model of regulator, consumer, and firm interaction, I determine the efficiency of the current rate formalization compared to Ramsey-Boiteux prices and two-part tariffs. I find within Texas's market increases to generator surplus up to 55% of subsidies could be achieved under Ramsey-Boiteux pricing or two-part tariffs, respectively. The second chapter presents a framework to analyze dynamic processes and long-run outcomes in two-sided markets, specifically dynamic platform and firm investment incentives within the internet-service platform/content provision market. I use the Ericson-Pakes framework applied within a platform that chooses fees on either side of its two-sided market. This chapter determines the impact of network neutrality on platform investment incentives, specifically whether to improve the platform. I use a parameterized calibration from engineering reports and current ISP literature to determine welfare outcomes and industry behavior under network neutral and non-neutral regimes. My final chapter explores retail firm failure within the deregulated Texas retail electricity market. This chapter investigates determinants of retail electric firm failures using duration analysis frameworks. In particular, this chapter investigates the impact of these determinants on firms with extant experience versus unsophisticated entrants. Understanding these determinants is an important component in evaluating whether deregulation achieves the impetus of competitive electricity market restructuring. Knowing which economic events decrease a market's competitiveness helps regulators to effectively evaluate policy implementations. I find that experience does benefit a firm's duration, but generally that benefit assists firm duration in an adverse macroeconomic environment rather than in response to adverse market conditions such as higher wholesale prices or increased transmission congestion. Additionally, I find evidence that within the Texas market entering earlier results in a longer likelihood of duration. / text