Termination fees revisited

Bruno Jullien, Patrick Rey and Wilfried Sand-Zantman

International Journal of Industrial Organization, 2013, vol. 31, issue 6, 738-750

Abstract: We reconsider the question of the optimal level of termination fees between communication networks in the context of heterogeneous usage and elastic participation. The interaction between these two features yields new insights; in our model: i) The profit maximizing reciprocal termination fee is above marginal cost; ii) the welfare maximizing termination fee is also above cost; iii) the welfare-maximizing termination fee is below the profit-maximizing one in the absence of termination-based price discrimination, but can be above it otherwise.

Keywords: Termination fee; Communication; Network; Mobile (search for similar items in EconPapers)
JEL-codes: D43 L51 L96 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0167718713000532
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Termination fees revisited (2012)
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:indorg:v:31:y:2013:i:6:p:738-750

DOI: 10.1016/j.ijindorg.2013.05.006

Access Statistics for this article

International Journal of Industrial Organization is currently edited by P. Bajari, B. Caillaud and N. Gandal

More articles in International Journal of Industrial Organization from Elsevier
Bibliographic data for series maintained by Catherine Liu ().