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A robust methodology for setting tariffs

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  • Buchanan, JT

Abstract

Pricing new or existing services is a challenge in the current state of the communications industry, with new industrial structures, fast technical change and varying degrees of competition and regulation. Basically the industry is newly immature, with few good models for, and little data on, the behaviour of consumers or competitors. In this paper we describe the development of a robust methodology for the determination of prices, able to cater for some of the sources of uncertainty in the real world, such as market behaviour. By robust, we mean the ability to re-use the basic model with relatively little change if, for example, the underlying sub-model of consumer behaviour is changed from cost minimising to risk averse, or the basis of pricing is changed from value to cost.

Suggested Citation

  • Buchanan, JT, 1998. "A robust methodology for setting tariffs," Telecommunications Policy, Elsevier, vol. 22(10), pages 863-874, November.
    • Handle: RePEc:eee:telpol:v:22:y:1998:i:10:p:863-874
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