Competition and Price Dispersion in International Long Distance Calling

US Department of Justice Economic Analysis Group Discussion Paper No. 01-3

33 Pages Posted: 14 Jun 2001

See all articles by Sean F. Ennis

Sean F. Ennis

Centre for Competition Policy, University of East Anglia; Norwich Business School, University of East Anglia

Date Written: April 2001

Abstract

This paper examines the relationship between changes in telecommunications provider concentration on international long distance routes and changes in prices on those routes. Overall, decreased concentration is associated with significantly lower prices to consumers of long distance services. However, the relationship between concentration and price varies according to the type of long distance plan considered. For the international flagship plans frequently selected by more price-conscious consumers of international long distance, increased competition on a route is associated with lower prices. In contrast, for the basic international plans that are the default selection for consumers who do not subscribe to special plans, increased competition on a route is actually associated with higher prices. Thus, somewhat surprisingly, price dispersion appears to increase as competition increases.

Keywords: Telecommunications, competition, price dispersion

JEL Classification: D43, L96

Suggested Citation

Ennis, Sean F., Competition and Price Dispersion in International Long Distance Calling (April 2001). US Department of Justice Economic Analysis Group Discussion Paper No. 01-3, Available at SSRN: https://ssrn.com/abstract=272141 or http://dx.doi.org/10.2139/ssrn.272141

Sean F. Ennis (Contact Author)

Centre for Competition Policy, University of East Anglia ( email )

United Kingdom
+44 (0)1603 591622 (Phone)

HOME PAGE: http://www.competitionpolicy.ac.uk

Norwich Business School, University of East Anglia ( email )

Norwich
NR4 7TJ
United Kingdom
+44 (0)1603 591622 (Phone)

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