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

Giuseppe d'Acquisto, Patrick Maillé (), Maurizio Naldi and Bruno Tuffin ()
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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 - UEB - Université européenne de Bretagne - European University of Brittany - Télécom Bretagne - IMT - Institut Mines-Télécom [Paris]
Bruno Tuffin: DIONYSOS - Dependability Interoperability and perfOrmance aNalYsiS Of networkS - Centre Inria de l'Université de Rennes - Inria - Institut National de Recherche en Informatique et en Automatique - IRISA-D2 - RÉSEAUX, TÉLÉCOMMUNICATION ET SERVICES - IRISA - Institut de Recherche en Informatique et Systèmes Aléatoires - UR - Université de Rennes - INSA Rennes - Institut National des Sciences Appliquées - Rennes - INSA - Institut National des Sciences Appliquées - UBS - Université de Bretagne Sud - ENS Rennes - École normale supérieure - Rennes - Inria - Institut National de Recherche en Informatique et en Automatique - Télécom Bretagne - CentraleSupélec - CNRS - Centre National de la Recherche Scientifique

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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.

Keywords: Network neutrality; Game theory; Pricing (search for similar items in EconPapers)
Date: 2012-06-25
New Economics Papers: this item is included in nep-com, nep-ind, nep-mkt and nep-net
Note: View the original document on HAL open archive server: https://hal.science/hal-00725050v1
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Published in NGI 2012: 8th Euro-NF Conference on Next Generation Internet, Jun 2012, Karlskrona, Sweden. pp.111-117

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00725050

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