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Analysis of Two-Part Tariff and Consumer's Welfare

THESIS ABSTRACT
The bulk of Internet Service Providers adopt two-part tariff. Two-part tariff means users should pay a fixed rental every month, and pay a varied fee base on their connecting hours.
Internet Service Provider group their customers by analyzing customer¡¦s demand level, and provides different group different Pay-Rating. We call this situation Multiple Pay-Rating. If Internet Service Provider provide their customers single Pay-Rating. We call this situation Single Pay-Rating. People always analyze two-part tariff in monopoly market. In this thesis I will analyze two-part tariff in oligopoly market.Then compare with the former, and we will know whether two-part tariff erode customer¡¦s welfare.
I will create a differentiate-product demand function base on Logit model, and build two-part tariff oligopoly competition model. Analyze the equilibrium in Single Pay-rating and in Multiple Pay-rating. And I drew several conclusions from the analysis.
1. In oligopoly market structure two-part tariff not necessarily deprive of customer¡¦s welfare. On the contrary if ISP group their customers, customer¡¦s welfare will improve.
2. If there are no differentiation between customers¡¦ utilities, nonlinear pricing will degraded to linear pricing. If customers¡¦ utilities are different, ISP will set up the unit connect fee equal to the unit cost, and the month rental will raised with the increasing differentiation between customers¡¦ utilities.
3. If Internet service provider group their customer and provide them different Pay-rating, the final equilibrium will be symmetrical equilibrium or non-symmetrical equilibrium.

Identiferoai:union.ndltd.org:NSYSU/oai:NSYSU:etd-0613100-163632
Date13 June 2000
CreatorsChan, Chih-Hsiung
ContributorsZ.J.Liu, F.S.Wang, Z.H.Wu, J.H.Chan
PublisherNSYSU
Source SetsNSYSU Electronic Thesis and Dissertation Archive
LanguageCholon
Detected LanguageEnglish
Typetext
Formatapplication/pdf
Sourcehttp://etd.lib.nsysu.edu.tw/ETD-db/ETD-search/view_etd?URN=etd-0613100-163632
Rightsunrestricted, Copyright information available at source archive

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