Understanding and Preventing Tacit Collusion among Telecommunication Operators

  • Authors:
  • Patrick Maillé;Maurizio Naldi;Bruno Tuffin

  • Affiliations:
  • Institut Telecom, Telecom Bretagne, Cesson Sévigné Cedex, France 35576;Dip. di Informatica Sistemi Produzione, Università di Roma Tor Vergata, Roma, Italy 00133;INRIA Rennes - Bretagne Atlantique, Rennes Cedex, France 35042

  • Venue:
  • NET-COOP '09 Proceedings of the 3rd Euro-NF Conference on Network Control and Optimization
  • Year:
  • 2009

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Abstract

Modeling the competition among telecommunication operators (or providers) as a repeated game may explain why tacit collusion to maintain high charging prices can be observed. Such outcomes clearly do not benefit the users, nor do they provide operators with incentives to improve the network quality of service to outperform their competitors. We propose a simple regulation based on price stability over time, to modify the game played by operators in a way that could prevent collusion.