Mobile Termination and Consumer Expectations under the Receiver-Pays Regime

Sjaak Hurkens and Ángel Luis López ()
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Ángel Luis López: SP-SP – Public-Private Sector Research Center, IESE Business School, http://www.angelluislopez.net/

No 10-12, Working Papers from NET Institute

Abstract: We analyze how termination charges affect retail prices when taking into account that receivers derive some utility from a call and when firms may charge consumers for receiving calls. A novel feature of our paper is that we consider passive self-fulfilling expectations and do not allow for negative reception charges. We reconfirm the finding of profit neutrality when firms cannot use termination-based price discrimination and show that connectivity is prone to breakdown.

Keywords: bill and keep; call externality; access pricing; interconnection; receiver pays; consumer expectations. (search for similar items in EconPapers)
JEL-codes: D43 K23 L51 L96 (search for similar items in EconPapers)
Date: 2010-09
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Citations: View citations in EconPapers (1)

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