Calling vs Receiving Party Pays: Market Penetration and the Importance of the Call Externality

Tommaso Majer (tommaso.majer@uab.es) and Michele Pistollato (michele.pistollato@uab.es)

UFAE and IAE Working Papers from Unitat de Fonaments de l'Anàlisi Econòmica (UAB) and Institut d'Anàlisi Econòmica (CSIC)

Abstract: In this paper we study how the access price affects the choice of the tariff regime taken by the network operators. We show that for high values of the access price, that is taken as a parameter by the firms, networks decide to charge only the callers. Otherwise, for low values of the access charge, networks charge also the receivers. Moreover, we compare market penetration and total welfare between the two price regimes. Our model suggests that, for high values of call externality, market penetration and total welfare are larger in Receiving Party Pays regime when the access charge is close to zero.

Keywords: Gender Segregation; Occupational Aspirations; Children; Socialization; Agency; Personality Traits; Mechanisms; British Household Panel Survey (search for similar items in EconPapers)
JEL-codes: L50 L96 (search for similar items in EconPapers)
Pages: 32
Date: 2010-10-26
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Persistent link: https://EconPapers.repec.org/RePEc:aub:autbar:845.10

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