How Long Is A Piece Of Wire? Equilibrium Determination Of Local Telephone Areas
This paper studies the endogenous determination of the nature of telephone calls, namely whether they are local or long distance. Calls between users in the same local calling area are local, and we allow the extension of this area to be treated as a strategic variable. We show that the extension of the calling areas which maximises the carrier's profit is the same that a welfare maximising regulator would choose. Under a price cap regime in which prices are required to meet an average price constraint, the firm is shown to manipulate strategically the extension of the local calling areas. We end the paper by considering the case of a competitive market. In this case, again, the owner of the local loop manipulates the extension of the local calling areas to increase profits.
|Date of creation:|
|Contact details of provider:|| Postal: Department of Economics and Related Studies, University of York, York, YO10 5DD, United Kingdom|
Phone: (0)1904 323776
Web page: https://www.york.ac.uk/economics/
More information through EDIRC
When requesting a correction, please mention this item's handle: RePEc:yor:yorken:00/03. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Paul Hodgson)
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.