Abstract

http://ssrn.com/abstract=1694365
 
 

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Mobile Termination and Consumer Expectations Under the Receiver-Pays Regime


Sjaak Hurkens


Institute for Economic Analysis (CSIC); Barcelona GSE; University of Navarra, IESE Business School

Angel Luis Lopez


University of Navarra - Department of Economics; IESE Business School

September 30, 2010

NET Institute Working Paper No. 10-12

Abstract:     
We analyze how termination charges a ect retail prices when taking into account that receivers derive some utility from a call and when rms may charge consumers for receiving calls. A novel feature of our paper is that we consider passive self-ful lling expectations and do not allow for negative reception charges. Firms only charge for receiving calls when the termination charge is below cost. We recon rm the nding of pro t neutrality when rms cannot use termination-based price discrimination. When rms can use termination-based price discrimination pro ts do depend on the termination charge. When the call externality is strong, rms prefer a below cost termination charge and will use RPP. When the call externality is weak, rms prefer a termination charge above cost. The termination charge that maximizes total welfare is below cost and would induce an RPP regime.

Number of Pages in PDF File: 34

Keywords: Bill and Keep, Call Externality, Access Pricing, Interconnection, Receiver Pays, Consumer Expectations

JEL Classification: D43, K23, L51, L96

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Date posted: October 20, 2010 ; Last revised: September 7, 2014

Suggested Citation

Hurkens, Sjaak and Lopez, Angel Luis, Mobile Termination and Consumer Expectations Under the Receiver-Pays Regime (September 30, 2010). NET Institute Working Paper No. 10-12. Available at SSRN: http://ssrn.com/abstract=1694365 or http://dx.doi.org/10.2139/ssrn.1694365

Contact Information

J.P.M. (Sjaak) Hurkens (Contact Author)
Institute for Economic Analysis (CSIC) ( email )
Campus UAB
Bellaterra, 08193
Spain
(34-93) 5806612 (Phone)
(34-93) 5801452 (Fax)
HOME PAGE: http://www.iae.csic.es/
Barcelona GSE
Spain
University of Navarra, IESE Business School
Avenida Pearson 21
Barcelona, 08034
Spain
Angel Luis Lopez
University of Navarra - Department of Economics ( email )
Pamplona, 31006
Spain
IESE Business School ( email )
Avenida Pearson 21
Barcelona, 08034
Spain
+ 34 932534200 (ext. 4554) (Phone)
HOME PAGE: http://www.angelluislopez.net
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