Reference

Angel Lopez, and Patrick Rey, Foreclosing Competition through Access Charges and Price Discrimination, The Journal of Industrial Economics, vol. 64, n. 3, September 2016, pp. 436–465.

Abstract

This article analyzes competition between two asymmetric networks, an incumbent and a new entrant. Networks compete in non-linear tarifs and may charge different prices for on-net and off-net calls. When access charges are high, this allows the incumbent to foreclose the market in a profitable way if switching costs are sufficiently large. In the absence of termination-based price discrimination, however, such foreclosure strategies are not profitable.

Replaces

Angel Lopez, and Patrick Rey, Foreclosing Competition through Access Charges and Price Discrimination, TSE Working Paper, n. 09-056, June 2009, revised April 2, 2015.