The Experts below are selected from a list of 8472 Experts worldwide ranked by ideXlab platform
Justus Haucap - One of the best experts on this subject based on the ideXlab platform.
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mobile Number Portability in europe
Telecommunications Policy, 2006Co-Authors: Stefan Buehler, Ralf Dewenter, Justus HaucapAbstract:This paper examines the causes and effects of mobile Number Portability (MNP) and provides a survey of its implementation in Europe. It first examines the competitive effects and costs of introducing MNP. Next, it discusses how to charge for MNP. It argues that a price cap regime starting from the average cost of porting is likely to provide appropriate incentives. Finally, it reviews recent experience with implementing MNP in Europe. Differences in the speed of porting and porting charges appear to explain part of the differences in the use of MNP across countries.
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mobile Number Portability in europe
Research Papers in Economics, 2005Co-Authors: Stefan Buehler, Ralf Dewenter, Justus HaucapAbstract:This paper examines the causes and effects of mobile Number Portability (MNP) and provides a survey of its implementation in Europe. We first examine the competitive effects and the costs of introducing MNP. Next, we discuss how to charge for MNP. We argue that a price cap regime starting from the average cost of porting is likely to provide appropriate incentives. Finally, we review the recent experience with implementing MNP in Europe. Differences in the speed of porting and porting charges appear to explain part of the differences in the use of MNP across countries.
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mobile Number Portability
Social Science Research Network, 2004Co-Authors: Stefan Buehler, Justus HaucapAbstract:This paper examines the consequences of introducing mobile Number Portability (MNP). We show that if the sole effect of introducing MNP is the abolishment of switching costs, MNP unambiguously benefits mobile customers. However, if MNP also causes consumer ignorance, as telephone Numbers no longer identify networks, mobile operators will increase termination charges, with ambiguous net effect on the surplus of mobile customers. We examine how extensions such as MNP based on call-forwarding, termination fee regulation, and alternative means of carrier identification affect these findings and discuss policy implications.
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mobile Number Portability
Research Papers in Economics, 2003Co-Authors: Stefan Buehler, Justus HaucapAbstract:This paper examines the consequences of introducing mobile Number Portability (MNP). As MNP allows consumers to keep their telephone Number when switching providers, it reduces consumers' switching costs. However, MNP may also cause consumer ignorance if telephone Numbers no longer identify networks. As a result, while fostering competition for mobile customers, MNP may also induce operators to increase termination charges for calls to mobile networks, generating ambiguous welfare effects. We examine how extensions such as MNP based on call-forwarding, termination fee regulation, and alternative means of carrier identification affect these findings.
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the economics of mobile telephone regulation
2003Co-Authors: Justus HaucapAbstract:This paper analyzes how competition works in mobile telecommuncations markets and, bases on this analysis, we discuss whether regulatory intervention in mobile telephone markets is justified from an economic perspective. Starting point of our analysis is the observation that an evaluation of regulatory interventions into mobile telecommunications markets cannot be made without a deeper understanding for competitive processes in mobile telephony. What is of decisive relevance for understanding competition in mobile telephony, is the fact that building a mobile telephone network requires highly specific investments, which take place under significant uncertainty, as investments in 3G networks such as UMTS illustrate. An inevitable consequence of specific investments are sunk costs. Hence, one can only expect firms to extensively invest and innovate if firms can hold a justified expectation to work profitably after they have invested. To cover their capital costs, which are largely fixed and not avoidable, firms need to follow a pricing policy that involves prices above incremental costs. Hence, a key determinant for mobile operators' price policy lies in their cost structure, which is characterized by high fixed and common costs that are also sunk and relatively low incremental costs. In such situations, efficiency demands so-called Ramsey pricing structures, which involves different mark-ups for different services. In contrast, a situation with uniform mark-ups will generally be inefficient. Instead, services with an inelastic demand should carry relatively high prices, while services, for which the demand is rather elastic, should be priced close to marginal costs. Exactly such a pricing structure results when unregualted firms are left to maximize their profits. Hence, the factor that prices and mark-ups differ between different services and markets is an efficiency imperative and not a sign for market failure. Nevertheless the necessity of interconnection and fixed-to-mobile termination may give rise to competition problems. As we argue in this paper, closer analysis shows that these problems do not automatically imply that sector specific regulation is warranted. The same hold for the question of regulated mobile Number Portability. Instead, an ex post introduction of sector specific reguation can be regarded as a brech of the implict regulatory contract by the State. This Government hold-up socializes and redistributes operators' profits, while the operators carried the initial investment risk. Such a Government hold-up reduces firms' incentives for investment and innovation and, thereby, also harms consumers in the long run. In addtion, there is a real risk of regulatory failure, as empirical evidence demonstrates. Based on these considerations, this paper fiercely advises against sector specific regulation of mobile telephone markets. The social welfare loss that would arise from such regulations are estimated to be enormous.
Brian V Viard - One of the best experts on this subject based on the ideXlab platform.
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do switching costs make markets more or less competitive the case of 800 Number Portability
The RAND Journal of Economics, 2007Co-Authors: Brian V ViardAbstract:Do switching costs reduce or intensify price competition if firms charge the same price to existing and new consumers? I study 800-Number Portability to determine how switching costs affect price competition under a single price regime. AT&T and MCI reduced their toll-free services prices in response to Portability, implying that reduced switching costs increased competition. Despite rapid market growth, gains from higher prices to “locked-in” consumers exceeded the incentives to capture new consumers. Prices on larger contracts dropped more, consistent with greater lock-in for larger users. Price changes between Portability's announcement and implementation are consistent with rational expectations.
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do switching costs make markets more or less competitive the case of 800 Number Portability
Social Science Research Network, 2005Co-Authors: Brian V ViardAbstract:Do switching costs reduce or intensify price competition in markets where firms charge the same price to old and new consumers? The answer is theoretically ambiguous because a firm prefers to charge a higher price to previous purchasers who are "locked-in" and a lower price to unattached consumers who offer higher future profitability. 800-Number Portability provides empirical evidence to determine whether switching costs reduce or intensify price competition under a single price regime. Before Portability, a customer had to change toll-free Numbers in order to change service providers. In May 1993, 800-Numbers became portable, under a regulatory regime that precluded price discrimination between old and new consumers. I test how AT&T and MCI adjusted their toll-free services prices in response to Portability. I find that the firms reduced prices with Portability, implying that the elimination of switching costs due to Portability made the market more competitive. Thus, despite rapid growth in toll-free services, the firms' incentives to charge a higher price to "locked-in" consumers exceeded their incentive to capture new consumers. Prices on larger contracts dropped more post-Portability than those on smaller contracts, consistent with greater "lock-in" for larger users. I also find evidence that price changes after Portability's announcement but before implementation are consistent with rational expectations assumptions of theoretical switching costs models.
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do switching costs make markets more or less competitive the case of 800 Number Portability
arXiv: Computers and Society, 2001Co-Authors: Brian V ViardAbstract:Do switching costs reduce or intensify price competition in markets where firms charge the same price to old and new consumers? Theoretically, the answer could be either "yes" or "no," due to two opposing incentives in firms' pricing decisions. The firm would like to charge a higher price to previous purchasers who are "locked-in" and a lower price to unattached consumers who offer higher future profitability. I demonstrate this ambiguity in an infinite-horizon theoretical model. 800- (toll-free) Number Portability provides empirical evidence to answer this question. Before Portability, a customer had to change Numbers to change service providers. This imposed significant switching costs on users, who generally invested heavily to publicize these Numbers. In May 1993 a new database made 800-Numbers portable. This drop in switching costs and regulations that precluded price discrimination between old and new consumers provide an empirical test of switching costs' effect on price competition. I use contracts for virtual private network (VPN) services to test how AT&T adjusted its prices for toll-free services in response to Portability. Preliminarily (awaiting completion of data collection), I find that AT&T reduced margins for VPN contracts containing toll-free services relative to those that did not as the Portability date approached. This implies that the switching costs due to non-Portability made the market less competitive. These results suggest that, despite toll-free services growing rapidly during this time period, AT&T's incentive to charge a higher price to "locked-in" consumers exceeded its incentive to capture new consumers in the high switching costs era of non-Portability.
Byongduk Rhee - One of the best experts on this subject based on the ideXlab platform.
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price competition with reduced consumer switching costs the case of wireless Number Portability in the cellular phone industry
Management Science, 2006Co-Authors: Mengze Shi, Jeongwen Chiang, Byongduk RheeAbstract:Wireless Number Portability (WNP) is a telecommunication regulatory policy that requires cellular phone service providers to allow customers who switch service subscriptions to retain their original phone Numbers. The right to retain the Number lowers the switching cost for a consumer. Thus, the purpose of the policy is to induce more competition and facilitate the growth of new or small service providers. In this paper, we show that WNP drives market price downward as expected but with a surprising twistrather than helping the smaller firms grow, the policy may accelerate the process of market concentration. We find that the main contributing factor to this peculiarity is the discriminatory pricing scheme prevalent in the industrythat is, a service provider charges a lower per-minute fee for the calls initiated and received within the same network than for the calls connected across two networks. Under this pricing scheme, a consumer who subscribes to a larger network would benefit more than if subscribing to a smaller network, despite the relatively higher fixed access fee that the former may charge. By lowering the barrier of switching, WNP creates a market condition conducive for a larger network to gain market share. We support our analysis with the empirical evidence gathered from Hong Kong where WNP was adopted in March 1999.
Graeme Woodbridge - One of the best experts on this subject based on the ideXlab platform.
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Numbers to the people regulation ownership and local Number Portability
Information Economics and Policy, 2001Co-Authors: Joshua S Gans, Stephen P King, Graeme WoodbridgeAbstract:Abstract Local Number Portability (LNP) is a key factor in the promotion of local call competition in telecommunications. By allowing a consumer to retain their Number when moving between local telephone providers, LNP reduces customers’ switching costs and makes it easier for new providers to compete for customers. But regulators face a Number of important choices when implementing LNP — what technology should be chosen, what are the costs of implementing LNP and who should pay? This paper considers how the regulator can implement LNP when there is asymmetric information about the optimal timing, choice and cost of technology and about the value of LNP to individual customers. We show that requiring each carrier to bear their own costs and creating transferable ownership of telephone Numbers may allow the regulator to overcome the problems created by asymmetric information.
Stefan Buehler - One of the best experts on this subject based on the ideXlab platform.
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mobile Number Portability in europe
Telecommunications Policy, 2006Co-Authors: Stefan Buehler, Ralf Dewenter, Justus HaucapAbstract:This paper examines the causes and effects of mobile Number Portability (MNP) and provides a survey of its implementation in Europe. It first examines the competitive effects and costs of introducing MNP. Next, it discusses how to charge for MNP. It argues that a price cap regime starting from the average cost of porting is likely to provide appropriate incentives. Finally, it reviews recent experience with implementing MNP in Europe. Differences in the speed of porting and porting charges appear to explain part of the differences in the use of MNP across countries.
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mobile Number Portability in europe
Research Papers in Economics, 2005Co-Authors: Stefan Buehler, Ralf Dewenter, Justus HaucapAbstract:This paper examines the causes and effects of mobile Number Portability (MNP) and provides a survey of its implementation in Europe. We first examine the competitive effects and the costs of introducing MNP. Next, we discuss how to charge for MNP. We argue that a price cap regime starting from the average cost of porting is likely to provide appropriate incentives. Finally, we review the recent experience with implementing MNP in Europe. Differences in the speed of porting and porting charges appear to explain part of the differences in the use of MNP across countries.
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mobile Number Portability
Social Science Research Network, 2004Co-Authors: Stefan Buehler, Justus HaucapAbstract:This paper examines the consequences of introducing mobile Number Portability (MNP). We show that if the sole effect of introducing MNP is the abolishment of switching costs, MNP unambiguously benefits mobile customers. However, if MNP also causes consumer ignorance, as telephone Numbers no longer identify networks, mobile operators will increase termination charges, with ambiguous net effect on the surplus of mobile customers. We examine how extensions such as MNP based on call-forwarding, termination fee regulation, and alternative means of carrier identification affect these findings and discuss policy implications.
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mobile Number Portability
Research Papers in Economics, 2003Co-Authors: Stefan Buehler, Justus HaucapAbstract:This paper examines the consequences of introducing mobile Number Portability (MNP). As MNP allows consumers to keep their telephone Number when switching providers, it reduces consumers' switching costs. However, MNP may also cause consumer ignorance if telephone Numbers no longer identify networks. As a result, while fostering competition for mobile customers, MNP may also induce operators to increase termination charges for calls to mobile networks, generating ambiguous welfare effects. We examine how extensions such as MNP based on call-forwarding, termination fee regulation, and alternative means of carrier identification affect these findings.
