Vertical or horizontal separation? - Alive2green

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Vertical and horizontal separation
Competition in networks • Not all markets are created equal – Competition works best when a market can support many independent firms, who can only affect each other by competing for customers – In network economies, firms benefit from large network size – the more they cooperate, the better – Conversely, if a very large firm in a network economy refuses to cooperate with others, it can drive everyone else out of business (especially if it is either not possible to replicate the network, or would be prohibitively expensive) • Key problem of network economies: how do you ensure that enough cooperation takes place between firms to support market development, but without stifling competition? 5
Page 1 and 2: Vertical or horizontal separation?
Page 3: Contents Outline of presentation
Page 7 and 8: Why separation? • Vertical and ho
Page 9 and 10: Substantial practical costs Vertica
Page 11 and 12: Geography is probably key Horizonta
Page 13 and 14: Market structure and regulation
Page 15 and 16: Vertical vs horizontal separation C
Page 17 and 18: The South African policy debate
Page 19 and 20: Conclusions
Page 21: Tel +27 (0)12 362 0024 Fax +27 (0)1

Vertical or horizontal separation? - Alive2green

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