Price distortion under fixed-mobile substitution
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. Copyright Associazione Amici di Economia e Politica Industriale 2015
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Volume (Year): 42 (2015)
Issue (Month): 4 (December)
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