This paper analyzes the entry-deterring power of free in-network pricing with multiple incumbents. Free in-network pricing may deter entry since it creates network externality that intensifies competition. One may expect that a particular entry-deterrent strategy adopted by all incumbents would have more entry-deterring power than when it is adopted by some incumbents only. However, we show that when free-in network plan has entry-deterrence power with two incumbent firms, sometimes one incumbent offering free in-network plan may have more entry deterrence power than both firms offering free in-network plans. In other words, we find that an asymmetric adoption of entry-deterrence strategies by the incumbent firms may be the best for entry deterrence. This result highlights the importance of the strategic choice of the pricing plan as a function of not only the likelihood/cost of entry but also of the plan choices of other firms, and may partially explain the asymmetric strategies used by competing firms.

中文翻译：

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免费的网络内定价作为一种威慑策略

本文分析了具有多个运营商的免费网络内定价的进入决定力。网络内免费定价可能会阻止进入，因为它会造成网络外部性，从而加剧竞争。可以预期，所有任职者采用的一种特定的进入阻止策略将比仅某些现任者采用时具有更大的阻止进入能力。但是，我们表明，当免费网络计划对两家现有公司具有进入威慑力时，有时一个提供免费网络内计划的现有公司可能比两个提供免费网络内计划的公司都具有更大的进入威慑力。换句话说，我们发现现任公司不对称地采用进入威慑策略可能是最好的进入威慑力。