The Breakdown of Connectivity Breakdowns

We show that the prediction of a strategic connectivity breakdown under a receiving-party-pays (RPP) system and discrimination between on- and off-net prices does not hold up once more than two networks are considered. Indeed, equilibria with finite call and receiving prices exist for a large and realistic range of call externality values. This allows regulation of termination rates to achieve the socially optimal retail pricing structure under RPP.

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Year of publication:	2012-10
Authors:	Hoernig, Steffen
Institutions:	C.E.P.R. Discussion Papers
Subject:	Connectivity breakdown \| Mobile network competition \| Receiving party pays \| Termination rates

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Extent:	application/pdf
Series:	CEPR Discussion Papers.
Type of publication:	Book / Working Paper
Notes:	Number 9189
Classification:	L13 - Oligopoly and Other Imperfect Markets ; L51 - Economics of Regulation
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10011084152