TY - JOUR
T1 - Going beyond duopoly
T2 - Connectivity breakdowns under receiving party pays
AU - Hoernig, Steffen
PY - 2016/9/1
Y1 - 2016/9/1
N2 - We show that the prediction of strategic connectivity breakdowns under a receiving-party-pays system and discrimination between on- and off-net prices does not hold up once more than two mobile networks are considered. Indeed, if there are at least three competing networks and enough utility is obtained from receiving calls, no strategic connectivity breakdowns occur. Private negotiations over access charges then achieve the efficient outcome. Bill & keep (zero access charges) and free outgoing and incoming calls are efficient if and only marginal costs of calls are zero.
AB - We show that the prediction of strategic connectivity breakdowns under a receiving-party-pays system and discrimination between on- and off-net prices does not hold up once more than two mobile networks are considered. Indeed, if there are at least three competing networks and enough utility is obtained from receiving calls, no strategic connectivity breakdowns occur. Private negotiations over access charges then achieve the efficient outcome. Bill & keep (zero access charges) and free outgoing and incoming calls are efficient if and only marginal costs of calls are zero.
KW - Connectivity breakdown
KW - Mobile network competition
KW - Receiving party pays
KW - Termination rates
UR - http://www.scopus.com/inward/record.url?scp=84982130929&partnerID=8YFLogxK
U2 - 10.1016/j.infoecopol.2016.06.003
DO - 10.1016/j.infoecopol.2016.06.003
M3 - Article
AN - SCOPUS:84982130929
SN - 0167-6245
VL - 36
SP - 1
EP - 9
JO - Information Economics and Policy
JF - Information Economics and Policy
ER -