Price distortion under fixed-mobile substitution

Marc Bourreau; Carlo Cambini; Steffen Hoernig

doi:10.1007/s40812-015-0017-2

Price distortion under fixed-mobile substitution

Marc Bourreau, Carlo Cambini, Steffen Hoernig

NOVA School of Business and Economics (NOVA SBE)

Research output: Contribution to journal › Article › peer-review

Abstract

This paper analyses the impact of substitution between fixed and mobile telephony on call prices. We develop a model where consumers differ in the benefits of mobility and firms price discriminate between on-net and off-net calls. We find that call prices are distorted downwards due to substitution possibilities and customer heterogeneity, and that this distortion increases with the fixed-mobile termination mark-up.

Original language	English
Pages (from-to)	441-454
Number of pages	14
Journal	Economia e Politica Industriale
Volume	42
Issue number	4
DOIs	https://doi.org/10.1007/s40812-015-0017-2
Publication status	Published - 1 Dec 2015

Keywords

Fixed-mobile substitution
Network competition
Price discrimination

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10.1007/s40812-015-0017-2

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title = "Price distortion under fixed-mobile substitution",

abstract = "This paper analyses the impact of substitution between fixed and mobile telephony on call prices. We develop a model where consumers differ in the benefits of mobility and firms price discriminate between on-net and off-net calls. We find that call prices are distorted downwards due to substitution possibilities and customer heterogeneity, and that this distortion increases with the fixed-mobile termination mark-up.",

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AB - This paper analyses the impact of substitution between fixed and mobile telephony on call prices. We develop a model where consumers differ in the benefits of mobility and firms price discriminate between on-net and off-net calls. We find that call prices are distorted downwards due to substitution possibilities and customer heterogeneity, and that this distortion increases with the fixed-mobile termination mark-up.

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Price distortion under fixed-mobile substitution

Abstract

Keywords

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