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- Publisher
- Wiley
- Copyright
- © 2016 the editors of The Scandinavian Journal of Economics .
- ISSN
- 0347-0520
- eISSN
- 1467-9442
- DOI
- 10.1111/sjoe.12125
- Publisher site
- See Article on Publisher Site
Abstract
The theoretical literature on mobile termination rates (MTRs) is inconclusive on how the level of MTRs affects overall consumer charges and firms' profits. We show that when firms offer bundles with fixed included usage – a tariff structure that has become more common in recent years – an identical change in all MTRs does not affect firms' retail prices or profits. We use a panel dataset from saturated European markets to estimate the effect of MTRs on mobile operators' profits. As predicted by the theoretical model, we cannot reject the fact that firms' profits are unaffected by an identical change in all MTRs.
Journal
The Scandinavian Journal of Economics – Wiley
Published: Jan 1, 2016
Keywords: ; ; ; ; ; ;