Individual Tariffs for Mobile Services: Bargaining Model and Calculation

Abstract

This paper aims to develop a bargaining model for calculation of individual tariffs for mobile service bundles. The paper first looks shortly at the intrinsic drivers of individual tariffs both from sociological and economic perspectives. It proceeds 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. 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. Preliminary results, which are based on a music training service, show that individual tariffs can be beneficial to both the user and the supplier