Calling Circles: Network Competition with Non-Uniform Calling Patterns

Roman Inderst, Tommaso Valletti and Steffen Hoernig

No 8114, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: We introduce a flexible model of telecommunications network competition with non-uniform calling patterns, which account for the fact that customers tend to make most calls to a small subset of people. Equilibrium call prices are distorted away from marginal cost, and competitive intensity is affected by the concentration of calling patterns. Contrary to previous predictions, jointly profit-maximizing access charges are set above termination cost in order to dampen competition, and the resulting on-net prices are below off-net prices, if calling patterns are sufficiently concentrated.

Keywords: Network competition; Non-uniform calling patterns; Termination charges (search for similar items in EconPapers)
JEL-codes: L13 L51 (search for similar items in EconPapers)
Date: 2010-11
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://cepr.org/publications/DP8114 (application/pdf)

Related works:
Journal Article: Calling circles: network competition with nonuniform calling patterns (2014)
Working Paper: Calling Circles: Network Competition with Non-Uniform Calling Patterns (2011)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:8114

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP8114

Access Statistics for this paper

More papers in CEPR Discussion Papers from Centre for Economic Policy Research 33 Great Sutton Street, London EC1V 0DX, UK.
Bibliographic data for series maintained by CEPR ().