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http://hdl.handle.net/10419/53223
  
Title:Foreclosing competition through access charges and price discrimination PDF Logo
Authors:López, Ángel L.
Rey, Patrick
Issue Date:2009
Series/Report no.:Nota di lavoro // Fondazione Eni Enrico Mattei: Institutions and markets 99.2009
Abstract: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. Departing from cost-based access pricing allows the incumbent to foreclose the market in a profitable way. If the incumbent benefits from customer inertia, then it has an incentive to insist in the highest possible access markup even if access charges are reciprocal and even in the absence of actual switching costs. If instead the entrant benefits from customer activism, then foreclosure is profitable only when switching costs are large enough.
Subjects:Access Pricing
Entry Deterrence
Interconnection
Network Competition
Two-way Access
JEL:L41
L51
L96
Document Type:Working Paper
Appears in Collections:FEEM Working Papers, Fondazione Eni Enrico Mattei

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