A Further Look at Two-way Network Competition in Telecommunications

Stefan Buehler

No 9904, SOI - Working Papers from Socioeconomic Institute - University of Zurich

Abstract: This paper develops a simple reduced form model of two-way network competition with linear retail pricing. Using the techniques of supermodular games, it is demonstrated that the most important results from the existing literature do not depend on routinely invoked assumptions, such as specific functional forms or the symmetry of the network operators. In particular, it is demonstrated that (i) firms do not need to be symmetric or regulated to have incentives to collude in access pricing, and (ii) due to the effects on social welfare, enforcing colluding firms to behave noncooperatively is not necessarily desirable.

Keywords: interconnection; supermodularity; tacit collusion; telecommunications (search for similar items in EconPapers)
JEL-codes: D43 K23 L43 L51 L96 (search for similar items in EconPapers)
Pages: 28 pages
Date: 1999-07, Revised 2000-04
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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https://www.zora.uzh.ch/id/eprint/52152/1/wp9904.pdf Revised version, 2000 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:soz:wpaper:9904

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