Customer ignorance, price-cap regulation, and rent-seeking in mobile roaming

Terje Ambjørnsen, Øystein Foros and Ole-Christian B. Wasenden

Information Economics and Policy, 2011, vol. 23, issue 1, 27-36

Abstract: Mobile phone usage when traveling abroad is expensive. Although the network connection switches frequently between available networks, the choice of network is largely independent of wholesale prices. As a consequence, we show that wholesale prices are strategic substitutes. The recent European price-cap regulation forces firms to reduce wholesale and retail roaming prices, but does not solve the underlying problem. There may thus be a permanent need for regulation analogous to what we have for domestic call termination. Furthermore, we show that there is a risk that wholesale price-cap regulation stimulates wasteful rent-seeking activity.

Keywords: Mobile; roaming; Price-cap; regulation; Rent-seeking (search for similar items in EconPapers)
Date: 2011
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167-6245(10)00029-6
Full text for ScienceDirect subscribers only

Related works:
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:eee:iepoli:v:23:y:2011:i:1:p:27-36

Access Statistics for this article

Information Economics and Policy is currently edited by D. Waterman

More articles in Information Economics and Policy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().