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Mobile Termination and Consumer Expectations under the Receiver-Pays Regime

Authors: Hurkens, Sjaak - Institute for Economic Analysis
Lopez, Angel L. - IESE Business School,
Keywords: Bill and Keep; Call externality; Access Pricing; Interconnection; Re- ceiver pays; Consumer Expectations
Issue Date: 2010
Series/Report no.: Net Institute Working Paper;10-12
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-ful filling expectations and do not allow for negative reception charges. We recon rm the finding of pro t neutrality when firms cannot use termination-based price discrimination and show that connectivity is prone to breakdown.
Appears in Collections:NET Institute Working Papers Series

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