IDEAS home Printed from https://ideas.repec.org/a/taf/applec/v38y2006i15p1821-1824.html
   My bibliography  Save this article

A result similar to the Odlyzko's 'Paris Metro Pricing'

Author

Listed:
  • Maxime de Marin de Montmarin

Abstract

The two-stage competition is investigated in which two Internet Service Providers (ISP) choose sequentially their capacities and then their prices while facing a flow of new customers who decide to belong to one ISP or the other on the basis of a comparison of access prices and of expected congestion rates. At the equilibrium of the game a vertical differentiation between the Internet Service Providers endogenously emerges: the firm which provides the larger network has the lowest rate of congestion and the highest access price. The ISP providing the smallest network (thus the most congested) earns the larger profit. It will be noticed that the spontaneous functioning of oligopolistic competition produces a result similar to the Odlyzko's 'Paris Metro Pricing': at the equilibrium the two competitors propose different prices and rates of congestion, the most expensive one being also the least congested.

Suggested Citation

  • Maxime de Marin de Montmarin, 2006. "A result similar to the Odlyzko's 'Paris Metro Pricing'," Applied Economics, Taylor & Francis Journals, vol. 38(15), pages 1821-1824.
    • Handle: RePEc:taf:applec:v:38:y:2006:i:15:p:1821-1824
    DOI: 10.1080/00036840500426967
    as

    Download full text from publisher

    File URL: http://www.tandfonline.com/doi/abs/10.1080/00036840500426967
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/00036840500426967?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:applec:v:38:y:2006:i:15:p:1821-1824. See general information about how to correct material in RePEc.

    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.

    We have no bibliographic references for this item. You can help adding them by using 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RAEC20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.