Access Charges in the Presence of Call Externalities

Publikation: Wissenschaftliche FachzeitschriftOriginalbeitrag in FachzeitschriftBegutachtung

Abstract

We introduce call externalities in the standard model of network competition with terminationbased price discrimination under a CPP regime, and employ a simple graphical analysis to study the outcome of competition. In contrast to recent results in the literature we find that even under linear pricing, access charges below marginal cost may be used as a collusion device, while offnet calls are priced above on-net calls in equilibrium. Moreover, it turns out that "bill and keep" arrangements may be welfare improving compared with cost based access pricing.
OriginalspracheEnglisch
Seiten (von - bis)1538 - 1645
FachzeitschriftContributions to Economic Analysis and Policy
Jahrgang3
Ausgabenummer1
DOIs
PublikationsstatusVeröffentlicht - 2005

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