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The Economics of Number Portability: Switching Costs and Two-Part Tariffs

Author

Listed:
  • Aoki, Reiko
  • 青木, 玲子
  • アオキ, レイコ
  • Small, John

Abstract

This paper interprets number portability as a reduction of switching costs in a model of competition between telephone companies. We identify several cases by their cost and demand characteristics and show that social benefit of number portability are not guaranteed. Analysis using two-part tariff highlights the effect of how the technological cost of switching cost reduction effects the final market allocation.

Suggested Citation

  • Aoki, Reiko & 青木, 玲子 & アオキ, レイコ & Small, John, 2010. "The Economics of Number Portability: Switching Costs and Two-Part Tariffs," PIE/CIS Discussion Paper 483, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:piecis:483
    Note: Originally Aoki, R., Small, J. "The Economics of Number Portability: Switching Costs and Two Part Tariffs". CRNEC Working Paper, University of Auckland, 1999.
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    References listed on IDEAS

    as
    1. Jean-Jacques Laffont & Patrick Rey & Jean Tirole, 1998. "Network Competition: I. Overview and Nondiscriminatory Pricing," RAND Journal of Economics, The RAND Corporation, vol. 29(1), pages 1-37, Spring.
    2. Yongmin Chen, 1997. "Paying Customers to Switch," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 6(4), pages 877-897, December.
    3. Paul Klemperer, 1995. "Competition when Consumers have Switching Costs: An Overview with Applications to Industrial Organization, Macroeconomics, and International Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 62(4), pages 515-539.
    4. Calem, Paul S. & Spulber, Daniel F., 1984. "Multiproduct two part tariffs," International Journal of Industrial Organization, Elsevier, vol. 2(2), pages 105-115, June.
    5. Joseph Farrell & Carl Shapiro, 1988. "Dynamic Competition with Switching Costs," RAND Journal of Economics, The RAND Corporation, vol. 19(1), pages 123-137, Spring.
    6. Klemperer, Paul D, 1988. "Welfare Effects of Entry into Markets with Switching Costs," Journal of Industrial Economics, Wiley Blackwell, vol. 37(2), pages 159-165, December.
    7. Gans Joshua S & King Stephen Peter, 2001. "Regulating Endogenous Customer Switching Costs," The B.E. Journal of Theoretical Economics, De Gruyter, vol. 1(1), pages 1-31, May.
    8. Oren, Shmuel S. & Smith, Stephen A. & Wilson, Robert B., 1983. "Competitive nonlinear tariffs," Journal of Economic Theory, Elsevier, vol. 29(1), pages 49-71, February.
    9. Spulber, Daniel F, 1981. "Spatial Nonlinear Pricing," American Economic Review, American Economic Association, vol. 71(5), pages 923-933, December.
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    Citations

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    Cited by:

    1. Stefan Buehler & Justus Haucap, 2004. "Mobile Number Portability," Journal of Industry, Competition and Trade, Springer, vol. 4(3), pages 223-238, September.
    2. AOKI Reiko & ARAI Yasuhiro, 2015. "Evolution of Standards and Innovation," Discussion papers 15136, Research Institute of Economy, Trade and Industry (RIETI).
    3. Aoki, Reiko & Arai, Yasuhiro, 2013. "Standards and Innovation: Technology vs. Installed Base," CIS Discussion paper series 601, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    4. Justus Haucap, 2003. "Telephone Number Allocation: A Property Rights Approach," European Journal of Law and Economics, Springer, vol. 15(2), pages 91-109, March.
    5. AOKI Reiko & ARAI Yasuhiro, 2013. "Evolution of Standards and Innovation," Discussion papers 13075, Research Institute of Economy, Trade and Industry (RIETI).
    6. Aoki, Reiko & Arai, Yasuhiro, 2014. "Evolution of Standards and Innovation," CIS Discussion paper series 619, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    7. Sean Lyons, 2006. "Measuring the Benefits of Mobile Number Portability," Trinity Economics Papers tep2009, Trinity College Dublin, Department of Economics.

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