Mobile termination charges: Calling Party Pays versus Receiving Party Pays

Calling party pays or receiving party pays? The diffusion of mobile telephony with endogenous regulation

This paper analyzes the impact on mobile telephony diffusion patterns of the two predominant payment regimes, calling party pays (CPP) and receiving party pays (RPP), for mobile termination services. By applying instrumental variable techniques to panel data we account for a possible interdependency of penetration rates and regulatory interventions. For this purpose we use data on political and...

Mobile Termination and Consumer Expectations under the Receiver-Pays Regime

We analyze how termination charges affect retail prices when taking into account that receivers derive some utility from a call and when firms may charge consumers for receiving calls. We assume that consumers form expectations about network sizes in a passive, but ex-post rational way. We show that RPP enlarges the set of equilibria compared to CPP. For a given termination charge and inelastic...

When Punishment Pays

Explaining cooperation in groups remains a key problem because reciprocity breaks down between more than two. Punishing individuals who contribute little provides a potential answer but changes the dilemma to why pay the costs of punishing which, like cooperation itself, provides a public good. Nevertheless, people are observed to punish others in behavioural economic games, posing a problem fo...

Who Pays for Disinflation?

Many economic observers applaud the current rate of inflation in the United States, claiming that the rate is so low that inflation has ceased to matter much in the decisions of individuals and businesses. Some, such as Martin Feldstein (1997), want to see inflation fall still further--to zero--arguing that such a reduction would yield substantial gains by allowing resources to be allocated mor...

Migrants' healthcare: who pays?