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Network competition with consumer switching costs: A model for the telecommunications sector

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  • VAN DE WIELLE, Bart

Abstract

This paper gives a model for price competition under consumer switching costs in a network setting with interconnection charges. This simultaneous analysis is conducted in a discrete choice model with a multinomial logit differentiation for the customers and not in a traditional Hotelling framework. Analytical equilibrium results are derived for duopoly competition between identical Firms with both homogeneous and heterogeneous customers. A numerical method was used to study the effects of having different installed bases and to allow for the introduction of market growth.

Suggested Citation

  • VAN DE WIELLE, Bart, "undated". "Network competition with consumer switching costs: A model for the telecommunications sector," Working Papers 2000016, University of Antwerp, Faculty of Business and Economics.
    • Handle: RePEc:ant:wpaper:2000016
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    File URL: https://repository.uantwerpen.be/docman/irua/09f7a6/9938ba99.pdf
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    More about this item

    Keywords

    Switching costs; Entry; Mobile telecommunications; Market growth;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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