The Economics of Number Portability: Switching Costs and Two-Part Tariffs

Posted by D. Daniel Sokol

Reiko Aoki and John Small  explain The Economics of Number Portability: Switching Costs and Two-Part Tariffs.

ABSTRACT: This paper interprets number portability as a reduction of switching costs in a model of competition between telephone companies. We identify several cases by their cost and demand characteristics and show that social benefit of number portability are not guaranteed. Analysis using two-part tariff highlights the effect of how the technological cost of switching cost reduction effects the final market allocation.