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040 |aCaOODSP|beng|erda|cCaOODSP
043 |an-us---
045 |ay0y1
0861 |aFB3-5/2020-9E-PDF
1001 |aCullen, Joseph |q(Joseph A.)|eauthor.
24510|aWelfare analysis of equilibria with and without early termination fees in the US wireless industry / |cby Joseph Cullen, Nicolas Schutz and Oleksandr Shcherbakov.
264 1|aOttawa, Ontario, Canada : |bBank of Canada = Banque du Canada, |c2020.
264 4|c©2020
300 |a1 online resource (ii, 47 pages) : |billustrations.
336 |atext|btxt|2rdacontent
337 |acomputer|bc|2rdamedia
338 |aonline resource|bcr|2rdacarrier
4901 |aStaff working paper = Document de travail du personnel, |x1701-9397 ; |v2020-9
500 |a"Last updated: March 23, 2020."
504 |aIncludes bibliographical references (pages 34-35).
5203 |a"We study the social welfare implications of early termination fees in the US wireless industry. It is hypothesized that the elimination of long-term contracts at the end of 2015 was a transition from one market equilibrium to another. We use a theoretical model to illustrate that the endogenous choice of consumer switching costs by service providers does not necessarily raise firms' profits or hurt consumers. The forward-looking behavior of consumers facing switching costs results in significant downward pressure on prices. Service fees may be so low that consumers are better off and firms are worse off in an equilibrium with switching costs. Empirically, we find that without early termination fees, firms would increase prices by 2 to 5 percent, on average, resulting in an unambiguous increase in consumer surplus. Firms' profits derived from monthly service fees also increase. However, if we consider additional revenues from contract termination payments, the cost of processing these payments should be large enough for producer profits to be higher in the new equilibrium"--Abstract, page ii.
650 0|aCell phone services industry|xRates|zUnited States|xEconometric models.
650 6|aTéléphone cellulaire|xIndustrie|xTarifs|zÉtats-Unis|xModèles économétriques.
7102 |aBank of Canada.
830#0|aStaff working paper (Bank of Canada)|v2020-9.|w(CaOODSP)9.806221
85640|qPDF|s955 KB|uhttps://publications.gc.ca/collections/collection_2020/banque-bank-canada/FB3-5-2020-9-eng.pdf