INDIVIDUAL TARIFFS FOR MOBILE SERVICE BUNDLES - A Negotiation Calculation Tool

Louis François Pau, Hong Chen

2006

Abstract

This paper aims to develop a bargaining model for calculation of individual tariffs for mobile service. In almost all publmic communication services today , tariffs are set unilateraly by the suppliers for some generic services ; the present and future emphasis on both unique content needs,and on service personalization, restrict the old tariffing principle to those users who only need basic universal services . Realizing this evolution , the ultimate goal is to provide a tool for computing individual tariffs. The paper first looks at the intrinsic drivers of individual tariffs both from sociological and economic perspectives. The paper proceeds further with a bargaining model for individual tariffs which is centered on user and supplier behaviours. The user, instead of being fully rational, has “bounded rationality” and his behaviours are not only subject to economic constraints but also influenced by social needs. The supplier can be either a firm (typically a communications service operator) or community ; each supplier has his own goals which lead to different behaviors. In the proposed solution, individual tariffs are decided through interactions between the user and the supplier. Game theory is employed to provide structured analyses of the interactions and tariff design. We developed a computational model based on the bargaining model. It can be used to determine the individual tariff between a firm and an individual user. Preliminary results, which are based on a music training service treated as a bundle of communications, content, and assistance , show that individual tariffs can be beneficial to both the user and the supplier.

References

  1. Aumann,R.J. ,1997, "Rationality and Bounded Rationality" , Games and Economic Behavior, vol. 21, pp. 2-14
  2. Bowles,S. , 2004, " Microeconomics: behavior, institutions, and evolution", New York: Russell Sage Foundation
  3. Chen, H. and Pau, L-F, 2004 , "Individual Telecommunications Tariffs in Chinese Communities: History as a Mirror of the Future, and Relevance for Mobile Service Development in China", Fourth International Conference on Electronic Business, Beijing ; Available from : https://ep.eur.nl/handle/1765/1582
  4. Chen,H. and Pau,L-F, 2006, "Individual Tariffs for Mobile Communication Services: a Computational Model", Beijing: 16th Biennial Conference of the International Telecommunications Society ITS
  5. Eden,B.,1990, "Marginal Cost Pricing When Spot Markets are Complete," Journal of Political Economy, vol. 98, pp. 1293-1306
  6. Franke, N. and Pille,F. ,2004, "Value Creation by Toolkits for User Innovation and Design: The Case of the Watch Market", Journal of Product Innovation Management, vol. 21, pp. 401-415
  7. Gergen,K.J., 2002, "The challenge of absent presence" in J. E. Katz and M. A. Aakhus, Eds. , "Perpetual Contact : Mobile Communication, Private Talk, Public Performance", Cambridge, New York: Cambridge University Press, pp. 227-241
  8. Giddens,A. , 1991, " Modernity and self-identity: self and society in the late modern age", Cambridge: Polity Press
  9. Hayek, F.A., 1980 ," Individualism and economic order" Chicago : University of Chicago Press
  10. Kahneman,D. and Frederick,S. , 2002, "Representativeness revisited: Attribute substitution in intuitive judgment", in T. Gilovich, D. Griffin, and D. Kahneman, Eds.,"Heuristics & Biases: The Psychology of Intuitive Judgment", New York: Cambridge University Press, pp. 49-81
  11. Lattin,J.M.;Carroll,J.D.; and Green,P.E., 2003, "Analyzing multivariate data". Pacific Grove, CA: Thomson /Brooks /Cole
  12. Levine,M.E. ,2001, "Price Discrimination Without Market Power," Law-Econ Discussion Paper No. 276, Harvard, Mass.: Harvard Law School
  13. Licoppe,C. , 2003 , "The Social Context of the Mobile Phone Use of Norwegian Teens", in J. E. Katz, Ed :"Machines That Become Us : The Social Context of Personal Communication Technology", New Brunswick, N.J: Transaction Publishing
  14. Manes,S., 2005, "Music in the Air," Forbes, vol. 176, pp. 74
  15. Pau,L-F, 2005, "Privacy management contracts and economics, using Service Level Agreements (SLA)" , Rotterdam : Erasmus Research Institute of Management ,ERIM report series research in management ERS-2005-014-LIS ;. Available from : https://ep.eur.nl/handle/1765/1938
  16. Pigou,A.C. ,1920 , "Discrimination Monopoly (Part II, Chapter XVII)," in "The Economics of welfare". London: Macmillan and Co
  17. Simon,H.A., 1979, "Rational Decision Making in Business Organizations", American Economic Review, vol. 69, pp. 493-513
  18. Tversky,A. and Kahneman,D., 1974 , "Judgment under Uncertainty: Heuristics and Biases", in: D. Kahneman, P. Slovic, and A. Tversky, Eds. New York: Cambridge University Press., pp. 1124-31
  19. Varian,H.R. ,1996 , "Differential Pricing and Efficiency", New York: First Monday
Download


Paper Citation


in Harvard Style

François Pau L. and Chen H. (2006). INDIVIDUAL TARIFFS FOR MOBILE SERVICE BUNDLES - A Negotiation Calculation Tool . In Proceedings of the International Conference on e-Business - Volume 1: ICE-B, (ICETE 2006) ISBN 978-972-8865-62-7, pages 31-37. DOI: 10.5220/0001424400310037


in Bibtex Style

@conference{ice-b06,
author={Louis François Pau and Hong Chen},
title={INDIVIDUAL TARIFFS FOR MOBILE SERVICE BUNDLES - A Negotiation Calculation Tool},
booktitle={Proceedings of the International Conference on e-Business - Volume 1: ICE-B, (ICETE 2006)},
year={2006},
pages={31-37},
publisher={SciTePress},
organization={INSTICC},
doi={10.5220/0001424400310037},
isbn={978-972-8865-62-7},
}


in EndNote Style

TY - CONF
JO - Proceedings of the International Conference on e-Business - Volume 1: ICE-B, (ICETE 2006)
TI - INDIVIDUAL TARIFFS FOR MOBILE SERVICE BUNDLES - A Negotiation Calculation Tool
SN - 978-972-8865-62-7
AU - François Pau L.
AU - Chen H.
PY - 2006
SP - 31
EP - 37
DO - 10.5220/0001424400310037