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Abstract

Telecommunications Services and Multi-Unit Firms: Inside the Black-Box

The Review of Network Economics

Vol. 6, Issue 1 - March 2007, pp 50 - 77


Author
  Anna Creti
Department of Economics and IEFE, Universita' Luigi Bocconi
E-mail: [email protected]

Abstract
  This paper analyzes telecommunications demand by firms, focusing on communication flows among production units. We consider first the case of two business units, that can play simultaneously or in a leader/follower situation regarding their communication decisions. In this context, we define the network effect as the advantage a production unit obtains by using an input whose costs are shared by another user. The model is then generalized, taking into account indirect links among production units. The theoretical framework we suggest explains business telecommunications usage by multi-unit firms, and sheds light on the relationship between firms' internal organisation and communication flows.

Keywords: Telecommunications, business demand, internal organization

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