Termination fees revisited

Jullien, Bruno, Rey, Patrick and Sand-Zantman, Wilfried (2013) Termination fees revisited. International Journal of Industrial Organization, 31 (n°6). pp. 738-750.

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Official URL: http://tse-fr.eu/pub/30609

Abstract

We reconsider the question of the optimal level of termination fees between communication networks in the context of heterogeneous usage and elastic participation. The interaction between these two features yields new insights; in our model: i) The profit maximizing reciprocal termination fee is above marginal cost; ii) the welfare maximizing termination fee is also above cost; iii) the welfare-maximizing termination fee is below the profit-maximizing one in the absence of termination-based price discrimination, but can be above it otherwise.

Item Type: Article
Language: English
Date: November 2013
Refereed: Yes
Uncontrolled Keywords: Termination fee, Communication, Network, Mobile
JEL codes: D43 - Oligopoly and Other Forms of Market Imperfection
L51 - Economics of Regulation
L96 - Telecommunications
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 25 Aug 2016 12:06
Last Modified: 10 Apr 2018 12:20
OAI ID: oai:tse-fr.eu:30609
URI: http://publications.ut-capitole.fr/id/eprint/22263

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