The Welfare Effects of Mobile Termination Rate Regulation in Asymmetric Oligopolies: The Case of Spain

22 Pages Posted: 24 Nov 2011

See all articles by Sjaak Hurkens

Sjaak Hurkens

Institute for Economic Analysis-CSIC; Barcelona GSE

Angel Luis Lopez

Autonomous University of Barcelona; IESE Business School

Date Written: October 1, 2011

Abstract

We examine the effects of mobile termination rate regulation in asymmetric oligopolies. We do this by extending existing models of asymmetric duopoly and symmetric oligopoly where consumer expectations about market shares are passive. We first calibrate product differentiation parameters using detailed data from the Spanish market from 2010. Next, we predict equilibrium outcomes and welfare effects under alternative scenarios of future termination rates. Lowering termination rates typically lowers profits of all networks and improves consumer and total surplus.

Keywords: Mobile Termination Rates, Network E¤ects, Simulations, Telecommunications, Welfare

JEL Classification: D43, K23, L51, L96

Suggested Citation

Hurkens, J.P.M. (Sjaak) and Lopez, Angel Luis, The Welfare Effects of Mobile Termination Rate Regulation in Asymmetric Oligopolies: The Case of Spain (October 1, 2011). NET Institute Working Paper No. 11-09, Available at SSRN: https://ssrn.com/abstract=1952754 or http://dx.doi.org/10.2139/ssrn.1952754

J.P.M. (Sjaak) Hurkens (Contact Author)

Institute for Economic Analysis-CSIC

campus UAB
Bellaterra, 08193
Spain

Barcelona GSE ( email )

Barcelona
Spain
(34-93) 5806612 (Phone)
(34-93) 5801452 (Fax)

Angel Luis Lopez

Autonomous University of Barcelona ( email )

Plaça Cívica
Cerdañola del Valles
Barcelona, Barcelona 08193
Spain
34935811528 (Fax)

HOME PAGE: http://angelluislopez.net

IESE Business School

Avenida Pearson 21
Barcelona, 08034
Spain
+ 34 932534200 (ext. 4554) (Phone)

HOME PAGE: http://www.angelluislopez.net

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