The strength of the waterbed effect depends on tariff type

C-Tier
Journal: Economics Letters
Year: 2014
Volume: 125
Issue: 2
Pages: 291-294

Score contribution per author:

1.005 = (α=2.01 / 1 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We show that the waterbed effect, i.e. the pass-through of a change in one price of a firm to its other prices, is much stronger if the latter include subscription rather than only usage fees. In particular, in mobile network competition with a fixed number of customers, the waterbed effect is full under two-part tariffs, while it is only partial under linear tariffs.

Technical Details

RePEc Handle
repec:eee:ecolet:v:125:y:2014:i:2:p:291-294
Journal Field
General
Author Count
1
Added to Database
2026-02-02