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Impact on retail prices of non-neutral wholesale prices for content providers

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Author Info

  • Giuseppe D'ACQUISTO

    (Garante per la protezione dei dati personali [Rome] - Garante per la protezione dei dati personali)

  • Patrick Maillé

    ()
    (RSM - Département Réseaux, Sécurité et Multimédia - Institut Mines-Télécom - Télécom Bretagne - Université Européenne de Bretagne (UEB))

  • Maurizio Naldi

    (DISP - Dipartimento di Informatica, Sistemi e Produzione [Roma] - Università degli Studi di Roma "Tor Vergata")

  • Bruno Tuffin

    (INRIA - IRISA - DIONYSOS - INRIA - Université de Rennes 1 - CNRS : UMR6074)

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    Abstract

    The impact of wholesale prices is examined in a context where the end customer access both free content and payper-use content, delivered by two different providers through a common network provider. We formulate and solve the game between the network provider and the pay-per-use content provider, where both use the price they separately charge the end customer with as a leverage to maximize their profits. In the neutral case (the network provider charges equal wholesale prices to the two content providers), the benefits coming from wholesale price reductions are largely retained by the pay-peruse content provider. When the free content provider is charged more than its pay-per-use competitor, both the network provider and the pay-per-use content provider see their profit increase, while the end customer experiences a negligible reduction in the retail price.

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    File URL: http://hal.archives-ouvertes.fr/docs/00/72/50/50/PDF/dacquisto2012impact.pdf
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    Bibliographic Info

    Paper provided by HAL in its series Post-Print with number hal-00725050.

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    Date of creation: 2012
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    Publication status: Published - Presented, NGI 2012: 8th Euro-NF Conference on Next Generation Internet, 2012, Karlskrona, Sweden
    Handle: RePEc:hal:journl:hal-00725050

    Note: View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00725050
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    Web page: http://hal.archives-ouvertes.fr/

    Related research

    Keywords: Network neutrality; Game theory; Pricing;

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    1. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, December.
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