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How Long is a Piece of Cable? Equilibrium Determination of Local Telephone Areas
2003
Journal of Economics
This paper studies the endogenous determination of telephone local calling areas. In many telephone systems, calls between users in the same calling area are local; calls to outside the calling area are long distance and priced differently. We allow the extension of this area to be treated as a strategic variable. We show the extension of the calling areas which maximises the carrier's profit to be the same which a welfare maximising regulator would choose. Under a price cap regime in which
doi:10.1007/s00712-002-0592-3
fatcat:yl5h22mmcbg7tcazw3sei5s4di