Stimulatory regulation in public services. The connection price of network services

The study deals with regulation of connection pricing of network services. Regulation of network sharing is one of the main problems in the regulation of public services. The model for regulating the connection price presented here outlines stimulatory regulation deriving from the information problems. It presents a market model of corporate decisions about network sharing, based on which the examination begins with the regulatory scope in a case of full information. Then comes stimulatory regulation for handling the problem of negative selection and moral risk. Finally comes a comparison from the welfare point of view of the results of an unregulated market, cost-based regulation that ignores information problems, and the stimulatory regulation presented by the authors.