دانلود مقاله ISI انگلیسی شماره 28235
عنوان فارسی مقاله

تجزیه و تحلیل اقتصادی از اصل پرداختی ها به گیرنده

کد مقاله سال انتشار مقاله انگلیسی ترجمه فارسی تعداد کلمات
28235 2001 30 صفحه PDF سفارش دهید محاسبه نشده
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عنوان انگلیسی
An economic analysis of the receiver pays principle
منبع

Publisher : Elsevier - Science Direct (الزویر - ساینس دایرکت)

Journal : Information Economics and Policy, Volume 13, Issue 2, June 2001, Pages 231–260

کلمات کلیدی
تماس گیرنده اصل پرداخت - اصول پرداختی گیرنده - هزینه اتصال -
پیش نمایش مقاله
پیش نمایش مقاله تجزیه و تحلیل اقتصادی از اصل پرداختی ها به گیرنده

چکیده انگلیسی

This paper examines the effect of the receiver pays principle (RPP) on the calling price, social welfare and interconnection charge. A significant difficulty with introducing this system in telecommunications pricing is the possibility that the receiving party may refuse to receive a call if the charge he has to bear is very high. We find the condition under which no calls are refused and show that the profit maximizing prices charged to the calling party and the receiving party must satisfy this condition. We demonstrate that the calling price under RPP must be lower than the price under the caller pays principle (CPP), that the profit of a firm will be increased under RPP, but that the consumer surplus will not necessarily be increased under RPP despite the lowered calling price. Also, we show that, if the demand function is linear, the reciprocal interconnection charge under RPP is higher than that under CPP.

مقدمه انگلیسی

The most striking characteristics of the telecommunications industry might be the presence of two kinds of externalities, network externalities and call externalities. Network externalities result from the fact that a subscriber to a network is made better off by being able to communicate with more people if more people subscribe to the network. Call externalities occur since both the calling party and the receiving party may benefit from a phone call, even though the cost usually falls entirely on the caller. Therefore, call externalities are the product of a particular usage fee payment system, the so-called the caller pays principle (CPP) under which the caller only is charged for a call, while network externalites are a characteristic inherent in the telecommunications industry. Then, a natural question arises: why is CPP is being used instead of the receiver pays principle (RPP) under which the receiving party is charged in part for a call as well, given the obvious free-riding of the receiving parties?1 The traditional rationale for this apparent unfairness is that, even if the receiver is bound to bear a part of the calling charge, the reduced amount of fees for a person in calling and the additional amount of fees to bear in receiving are almost averaged out, if the calling ratio and the receiving ratio are similar, so that CPP is equivalent to RPP. Furthermore, if we take into account technical difficulties and administration costs involved with collecting charges from the receivers as well, it seems that there is no reason to use RPP instead of CPP.2 However, in fact, this is true only in a restricted sense. First of all, there currently coexist several networks interconnected to each other, say the Public Switched Telephone Network (PSTN) and mobile networks, whose call traffic patterns are asymmetric.3 In most countries, a large proportion of calls originating from a mobile network terminate on the PSTN and only a small proportion of calls made on the PSTN terminate on mobile networks. This implies that subscribers to mobile networks subsidize subscribers to the PSTN. This observation weakens the strong rationale that has justified CPP and favours an alternative fee system whereby the receiver pays for part of a phone call. Moreover, even in a situation where there is no mobile network, and asymmetry in calling patterns is not significant, internalization of call externalities by dividing a calling charge between the caller and the receiver would lower the calling price, thereby increasing calling, which would obviously affect social welfare. Of course, RPP is not the only way to internalize call externalities. Many informal mechanisms seem to have a similar effect. For instance, voluntary negotiations between calling parties may help internalize some call externalities (Coase, 1960). However, Acton and Vogelsang (1990) suspects that such voluntary negotiations are highly unlikely (especially for international calls) because negotiations that would lead to internalization themselves require phone calls. On the other hand, Littlechild (1977) points out that “friends who talk long distance regularly can agree to take turns.” In other words, he regards call externalities as not substantial relative to network externalites since they can be easily internalized by cooperation between calling parties.4 However, this argument is based on a repeated relation between the parties. Since a large proportion of telephone communications are accidental, it is hard to expect enough internalization of call externalites by cooperation.5 In this paper, we examine the effect of RPP on the calling price, social welfare and the interconnection charge. A significant difficulty in introducing this system in telecommunications pricing is the possibility of nuisance calls that give negative utility to the receivers. However, this may not be a serious problem in a practical sense. Usually, a receiver can tell whether the call he is receiving is a nuisance or not within a very short time interval, such as 5–10 s. So, if the receiver is charged only after the lapse of 5–10 s from the instant he received the call, this problem will disappear (even if a small amount of losses to the firm are inevitable). Recently developed services such as selective call blocking, caller line identification or a voice mail system will also serve to alleviate this problem. Another problem is the possibility that the receiving party may refuse to receive a call if the charge he has to bear is unreasonably high.6 We find the condition under which no calls are refused and show that the profit maximizing prices charged to the calling party and the receiving party must satisfy this condition. Two models are provided in this paper. First, in a simple model with a single network, we demonstrate that the calling price under RPP must be lower than the price under CPP. Also, we find some interesting results that the profit of a firm will be increased under RPP but that consumer surplus will not be necessarily increased under RPP despite the lowered calling price. However, it will also be shown that, if the demand for calls has a constant price elasticity, the consumer surplus will be unambiguously increased under RPP. Second, we show that the results obtained in the model with a single network are all carried over to a general model with two networks in which each network operator charges both the calling price and the receiving price for a call originating from the network.7 Also, we derive some implications of the RPP system on the access pricing. In particular, it is shown that introducing RPP has a negative effect on the interconnection charge in the sense that the reciprocal access charge is higher under RPP than under CPP. Recently, Laffont and Tirole (2000) independently made an analysis of the receiver pays principle in an alternative model where the receiving price of a call can be determined by the operator of the network on which the call terminates. Although this may be a more realistic model, one faces a serious non-convexity problem in analyzing it. If price discrimination between on-net calls and off-net calls is allowed, a firm tends to make the receiving price for an off-net call as high as possible. A similar problem can occur even in the case of no price discrimination as long as the receiver can refuse to receive calls.8 Based on this argument, they suggest that the receiving prices be either subject to regulate or determined cooperatively. Our setup provides another way how to overcome the nonconvexity problem by alleviating firms’ incentive to increase receiving prices. To the best of our knowledge, the first paper that deals with the receiver pays principle in telecommunications pricing is Doyle and Smith (1998). Their main interest, however, lies in the effect of RPP on prices of calls to mobiles.9 In their model, a mobile service provider sets a total posted price of a fixed to a mobile call and a mobile subscriber receiving a call from a fixed phone pays the amount equal to the total posted price minus the charge paid by the call originator.10 After all, the price for receiving a call is determined by the mobile service provider to which the receiver subscribe, which is the main feature that is distinguished from our model. Also, in order to avoid complexities involved with price discrimination between on-net and off-net calls, they assume that all calls made by mobile subscribers terminate on the fixed network. Moreover, the option of using RPP is available only to one firm (mobile service provider) in their model. Our paper improves their analysis in this respect.

نتیجه گیری انگلیسی

In this paper we have explored the effect of the receiver pays principle (RPP) both in a model with one PSTN and in a model with one PSTN and one mobile network. Our main findings are that, under mild conditions, RPP can increase not only the consumer surplus but also the firm’s profit and that RPP makes firms set a higher reciprocal access charge than CPP does. In practice, it will be a controversial issue whether replacing CPP by RPP will improve social welfare or not. The regulatory authority who concerns itself with maximizing consumer surplus may hesitate to adopt RPP on the ground that it may reduce consumer surplus since the inelastic demand for telecommunication services will keep pC* high enough. However, we strongly believe that it is not very likely to occur because consumer surplus will be increased under RPP unless the price elasticity of demand gets smaller very rapidly as the price falls. We may consider various alternative models. First, firms may use more general tariffs than the simple linear pricing used throughout in this paper. If firms offer two-part tariffs instead of linear tariffs, for example, incorporating RPP will affect the usage fee while it will leave the fixed fee unaffected. RPP functions as lowering the usage fee for the caller but it does not affect the fixed fee.31 Also, firms can price discriminate between on-net calls an off-net calls. This kind of price discrimination under CPP is analyzed in details in Laffont et al. (1998b) and it would be possible to extend their arguments to the regime where the receiver pays some. Second, it is common that two networks have different cost structures. In particular, the marginal cost of mobile termination is much higher than that of fixed termination in practice. In this case, the desired access charges of each network will certainly be different and it seems unfair to the mobile service provider to require the reciprocal access charge. However, if we do not impose reciprocity of access charge, the consequence that each firm sets a separate access charge would be high access charges due to double marginalization (Laffont et al., 1998a). In this respect, it will deserve to see how the effect of introducing RPP on the access charges can be affected in this nonreciprocal environment. Third, firms may adopt an alternative payment system whereby the called party pays all as in the US mobile service. Or, firms may collect charges from their respective subscribers themselves as interconnection charges whenever they receive calls from the other network rather than allow the other network to collect the charges and then make settlements afterwards. However, such schemes will be generally suboptimal since they are just special cases of the general scheme considered in Section 3. Fourth, we may endogenize the firms’ decisions about whether they will choose CPP or RPP. If one firm adopts RPP and the other does CPP, a consumer who subscribes to the service provider adopting CPP will pay the whole price for his making calls and be charged for calls received from the other network as well and thus it is expected that the network size of the firm adopting RPP will be larger. Therefore, we conjecture that both firms will adopt RPP in equilibrium. Finally, in reality, several mobile telephony companies are operating together with one PSTN provider or two PSTN providers. In particular, if there are several PSTN’s and several mobile networks involved, we may address the issue of strategic alliances between a PSTN and a mobile network which are exclusive to each other.

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