Bill-and-Keep vs. Cost-Based Access Pricing Revisited

Ulrich Berger

doi:10.1016/j.econlet.2004.07.003

Bill-and-Keep vs. Cost-Based Access Pricing Revisited

Ulrich Berger

Department of Economics (Berger)

Publication: Scientific journal › Journal article › Research › peer-review

Abstract

We study network competition with two-part tariffs and termination-based price discrimination in the presence of call externalities. We show that both the collusive and the welfare-maximizing access charges fall below marginal cost. Moreover, bill-and-keep arrangements are welfare improving compared with cost-based access pricing.

Original language	English
Pages (from-to)	107 - 112
Journal	Economics Letters
Volume	86
Issue number	1
DOIs	https://doi.org/10.1016/j.econlet.2004.07.003
Publication status	Published - 2005

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Cite this

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title = "Bill-and-Keep vs. Cost-Based Access Pricing Revisited",

abstract = "We study network competition with two-part tariffs and termination-based price discrimination in the presence of call externalities. We show that both the collusive and the welfare-maximizing access charges fall below marginal cost. Moreover, bill-and-keep arrangements are welfare improving compared with cost-based access pricing.",

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AB - We study network competition with two-part tariffs and termination-based price discrimination in the presence of call externalities. We show that both the collusive and the welfare-maximizing access charges fall below marginal cost. Moreover, bill-and-keep arrangements are welfare improving compared with cost-based access pricing.

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DO - 10.1016/j.econlet.2004.07.003

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