Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/181567
Authors: 
Göller, Daniel
Andersson, Kjetil
Year of Publication: 
2018
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2018: Digitale Wirtschaft - Session: Industrial Organisation - Markets E09-V2
Abstract: 
A substantial share of customers in emerging markets use dual-SIM phones and subscribe to two mobile networks. A primary motive for so called multi-simming is to take advantage of cheap on-net services from both networks. In our modelling effort, we augment the seminal model of competing telephone networks á la Laffont, Rey and Tirole (1998b) by a segment of flexible price hunters that may choose to multi-sim. According to our findings, in equilibrium, the networks set a high off-net price in the linear tariffs to achieve segmentation. This induces the price hunters to multi- sim. We show that increased deployment of dual-SIM phones may induce a mixing equilibrium with high expected on-net prices. Thus, somewhat paradoxically, deployment of a technology that increases substitutability, and thereby competition, may end up raising prices.
Subjects: 
Network competition
multi-sim
dual-SIM phones
price discrimination
JEL: 
D43
L13
L96
D43
L13
L96
Document Type: 
Conference Paper
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