Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/181642
Authors: 
Fischer, Christian
Rasch, Alexander
Year of Publication: 
2018
Series/Report no.: 
Beiträge zur Jahrestagung des Vereins für Socialpolitik 2018: Digitale Wirtschaft - Session: Industrial Organisation - Theory I C08-V1
Abstract: 
We analyze a situation in which two horizontally differentiated firms compete in two-part tariffs (i.e., a linear and fixed price), and some consumers are not informed about the linear per-unit price. We show that there is a non-monotone relationship between the degree of consumer-side transparency and firm profits. Moreover, different from a situation without uninformed consumers, firms may make higher profits under two-part tariffs than under fixed fees only. There is also a non-monotone relationship between transparency and consumer surplus. Our model can explain why firms are against the abolishment of roaming fees and why the European Commission (EC) promotes it.
Subjects: 
fixed fee
linear price
roaming
transparency
two-part tariff
JEL: 
D43
L13
L42
Document Type: 
Conference Paper
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