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5 - Infrastructure pricing negotiations: evaluating alternatives when facing a significant market power

Published online by Cambridge University Press:  29 June 2009

J. P. Singh
Affiliation:
Georgetown University, Washington DC
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Summary

A price that blocks exchange among willing exchangers is clearly not an efficiency price, but which of the various prices that do not block it is the efficiency price? An answer sufficient for all purposes at this point is that the efficiency price is the price that would be established if the sellers and buyers became so numerous that no single buyer or seller could manipulate the price.

Charles E. Lindblom Politics and Markets

In an increasingly interconnected global economy, the assumption is too often made that countries will abide by written and unwritten rules backed by a majority of global actors. When we come across cases that go against these established rules, then consideration needs to be given to how the country or coalition was able to pull off such a feat. This chapter discusses two cases where the US did not change its position against pressures from the rest of the world; in both cases the concentration of power, namely market power, advantaged the US in the negotiations.

The international telecommunications pricing regime changed very little since multilateral coordination began in the mid nineteenth century until the 1990s (see Chapter 4). The cartel of monopoly carriers and PTTs worked hard to maintain high profits from international calls. Change was only supposed to occur when there was a general consensus in the cartel.

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Publisher: Cambridge University Press
Print publication year: 2008

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