Network Competition and Access Charge Rules
AbstractThis paper presents a model of two competing local telecommunications networks which are mandated to interconnect. After negotiating the access charges, the companies engage in price competition. Given the prices, each consumer selects a network and determines the consumption of phone calls. Using a discrete/continuous consumer choice model, it is shown that a pure strategy equilibrium exists quite generally and satisfies desirable properties. This equilibrium can be implemented by a simple rule that sets the access charges at a common discount from the retail prices. It requires no information and the discount factor is chosen by the companies through negotiations. Finally, if the networks are highly substitute, the retail prices obtained by imposing this rule will approximate the efficient prices. Copyright 2002 by Blackwell Publishers Ltd and The Victoria University of Manchester
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by University of Manchester in its journal Manchester School.
Volume (Year): 70 (2002)
Issue (Month): 1 (January)
Contact details of provider:
Postal: Manchester M13 9PL
Phone: (0)161 275 4868
Fax: (0)161 275 4812
Web page: http://www.blackwellpublishing.com/journal.asp?ref=1463-6786
More information through EDIRC
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Peitz, Martin & Valletti, Tommaso M. & Wright, Julian, 2004. "Competition in telecommunications: an introduction," Information Economics and Policy, Elsevier, vol. 16(3), pages 315-321, September.
- Doh-Shin Jeon, 2005. "A simple access pricing rule to achieve the Ramsey outcome for interconnected networks," Economics Working Papers 808, Department of Economics and Business, Universitat Pompeu Fabra, revised Sep 2005.
- Joan Calzada & Tommaso M. Valletti, 2008.
"Network Competition and Entry Deterrence,"
Royal Economic Society, vol. 118(531), pages 1223-1244, 08.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wiley-Blackwell Digital Licensing) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.