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Impact on retail prices of non-neutral wholesale prices for content providers

Author

Listed:
  • Giuseppe d'Acquisto

    (Garante per la protezione dei dati personali [Rome] - Garante per la protezione dei dati personali)

  • Patrick Maillé

    (RSM - Département Réseaux, Sécurité et Multimédia - UEB - Université européenne de Bretagne - European University of Brittany - Télécom Bretagne - IMT - Institut Mines-Télécom [Paris])

  • Maurizio Naldi

    (DISP - Dipartimento di Informatica, Sistemi e Produzione [Roma] - Università degli Studi di Roma Tor Vergata [Roma, Italia] = University of Rome Tor Vergata [Rome, Italy] = Université de Rome Tor Vergata [Rome, Italie])

  • Bruno Tuffin

    (DIONYSOS - Dependability Interoperability and perfOrmance aNalYsiS Of networkS - Inria Rennes – Bretagne Atlantique - Inria - Institut National de Recherche en Informatique et en Automatique - IRISA-D2 - RÉSEAUX, TÉLÉCOMMUNICATION ET SERVICES - IRISA - Institut de Recherche en Informatique et Systèmes Aléatoires - UR - Université de Rennes - INSA Rennes - Institut National des Sciences Appliquées - Rennes - INSA - Institut National des Sciences Appliquées - UBS - Université de Bretagne Sud - ENS Rennes - École normale supérieure - Rennes - Inria - Institut National de Recherche en Informatique et en Automatique - Télécom Bretagne - CentraleSupélec - CNRS - Centre National de la Recherche Scientifique)

Abstract

The impact of wholesale prices is examined in a context where the end customer access both free content and payper-use content, delivered by two different providers through a common network provider. We formulate and solve the game between the network provider and the pay-per-use content provider, where both use the price they separately charge the end customer with as a leverage to maximize their profits. In the neutral case (the network provider charges equal wholesale prices to the two content providers), the benefits coming from wholesale price reductions are largely retained by the pay-peruse content provider. When the free content provider is charged more than its pay-per-use competitor, both the network provider and the pay-per-use content provider see their profit increase, while the end customer experiences a negligible reduction in the retail price.

Suggested Citation

  • Giuseppe d'Acquisto & Patrick Maillé & Maurizio Naldi & Bruno Tuffin, 2012. "Impact on retail prices of non-neutral wholesale prices for content providers," Post-Print hal-00725050, HAL.
    • Handle: RePEc:hal:journl:hal-00725050
    Note: View the original document on HAL open archive server: https://hal.science/hal-00725050v1
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    References listed on IDEAS

    as
    1. Gad Allon & Awi Federgruen, 2008. "Service Competition with General Queueing Facilities," Operations Research, INFORMS, vol. 56(4), pages 827-849, August.
    2. François Boussion & Patrick Maillé & Bruno Tuffin, 2012. "Net Neutrality Debate: Impact of Competition among ISPs," Post-Print hal-00725489, HAL.
    3. Martin J. Osborne & Ariel Rubinstein, 1994. "A Course in Game Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262650401, April.
    Full references (including those not matched with items on IDEAS)

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    Keywords

    Network neutrality; Game theory; Pricing;
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