Competition between multiple asymmetric networks: Theory and applications

Steffen Hoernig

International Journal of Industrial Organization, 2014, vol. 32, issue C, 57-69

Abstract: This paper presents a tractable model of network competition with many firms, elastic subscriber demand, off-net price discrimination, call externalities, and cost and market share asymmetries. We characterize stability in expectations and equilibrium under firm- and market-level network effects. The model is applied to simulate the effects of termination rates, market maturity, and retail pricing strategies. We show that predictions based on duopoly models can be misleading, in particular concerning the effects of termination rates.

Keywords: Telecommunications network competition; Elastic demand; On-/off-net pricing; Asymmetry; Multiple networks; Mobile termination rates (search for similar items in EconPapers)
JEL-codes: D43 L13 L51 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (17)

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Working Paper: Competition Between Multiple Asymmetric Networks: Theory and Applications (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:32:y:2014:i:c:p:57-69

DOI: 10.1016/j.ijindorg.2013.11.002

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