Price distortion under fixed-mobile substitution

Marc Bourreau, Carlo Cambini, Steffen Hoernig

Research output: Contribution to journalArticle

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 languageEnglish
Pages (from-to)441-454
Number of pages14
JournalEconomia e Politica Industriale
Volume42
Issue number4
DOIs
Publication statusPublished - 1 Dec 2015

Keywords

  • Fixed-mobile substitution
  • Network competition
  • Price discrimination

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