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Algorithms for Optimal Price Regulations Alexander Grigoriev1

Summary: Algorithms for Optimal Price Regulations
Alexander Grigoriev1
, Joyce van Loon1
, and Marc Uetz2
Maastricht University, Quantitative Economics,
P.O.Box 616, NL­6200 MD Maastricht, The Netherlands
University of Twente, Applied Mathematics,
P.O. Box 217, NL­7500 AE Enschede, The Netherlands
Abstract. Since summer 2007, mobile phone users in the European
Union (EU) are protected by a ceiling on the roaming tariff when call-
ing or receiving a call abroad. We analyze the effects of this price reg-
ulative policy, and compare it to alternative implementations of price
regulations. The problem is a three-level mathematical program: The
EU determines the price regulative policy that maximizes overall social
welfare, the telephone operator sets profit-maximizing prices, and cus-
tomers choose to accept or decline the operator's offer. The first part of


Source: Al Hanbali, Ahmad - Department of Applied Mathematics, Universiteit Twente


Collections: Engineering