Going beyond duopoly: Connectivity breakdowns under receiving party pays

Steffen Hoernig

Information Economics and Policy, 2016, vol. 36, issue C, 1-9

Abstract: We show that the prediction of strategic connectivity breakdowns under a receiving-party-pays system and discrimination between on- and off-net prices does not hold up once more than two mobile networks are considered. Indeed, if there are at least three competing networks and enough utility is obtained from receiving calls, no strategic connectivity breakdowns occur. Private negotiations over access charges then achieve the efficient outcome. Bill & keep (zero access charges) and free outgoing and incoming calls are efficient if and only marginal costs of calls are zero.

Keywords: Mobile network competition; Receiving party pays; Connectivity breakdown; Termination rates (search for similar items in EconPapers)
JEL-codes: L13 L51 (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Working Paper: Going beyond duopoly: connectivity breakdowns under receiving party pays (2014)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:iepoli:v:36:y:2016:i:c:p:1-9

DOI: 10.1016/j.infoecopol.2016.06.003

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