Foreclosing Competition Through High Access Charges and Price Discrimination

Ángel L. López, Patrick Rey

Research output: Contribution to journalArticleResearchpeer-review

7 Citations (Scopus)

Abstract

© 2016 The Editorial Board of The Journal of Industrial Economics and John Wiley & Sons Ltd This article analyzes competition between two asymmetric networks, an incumbent and a new entrant. Networks compete in non-linear tariffs and may charge different prices for on-net and off-net calls. When access charges are high, this allows the incumbent to foreclose the market in a profitable way if switching costs are sufficiently large. In the absence of termination-based price discrimination, however, such foreclosure strategies are not profitable.
Original languageEnglish
Pages (from-to)436-465
JournalJournal of Industrial Economics
Volume64
Issue number3
DOIs
Publication statusPublished - 1 Sep 2016

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