Topic
Draw on your economic theory and review of the evidence to critically evaluate the two recommendations of the Competition Commission regarding the price of pre-paid data bundles. Are the recommendations justified in terms of economic theory and empirical evidence?
Requirements
In answering this question:
• Focus only on the prices of pre-paid data bundles.
• Assume that there are no differences in the quality of pre-paid data bundles offered by different mobile
operators (i.e. the bundles are homogenous).
• Use your economic theory on duopolies and price discrimination to explain the pricing behaviour of
Vodacom and MTN. Use figures in your theoretical analysis.
• Present a critical balanced perspective that takes into account at least two of the Data Market Inquiry
Submissions (https://www.compcom.co.za/data-market-inquiry-submissions/ ) (one for and one against the
recommendations). Show evidence of engagement with the literature.
• Discuss the empirical evidence in support and against the recommendations
• Discuss the outcomes in response to the Commission’s ruling.
• Ensure you reference the literature appropriately.
Below are several references to articles and research units that may be of use to you when preparing your essay. This is NOT a prescribed reading list. The references are provided to help you as you search for relevant literature.
References and other material
• Course material for module 2 of Eco2003F
• Competition Commission (2019) Data Services Market Inquiry Final Report (https://www.ellipsis.co.za/wp-content/uploads/2019/12/Data-Service-Market-Inquiry-%E2%80%93-Final-
Report.pdf)
• Data Market Inquiry Submissions: https://www.compcom.co.za/data-market-inquiry-submissions/
Note:
– If you decide to include a diagram, the diagrams should be integrated into your discussions and not attached as an appendix. Explain clearly the information conveyed by each of your diagrams/charts.
– Support your arguments with evidence from the readings provided on Vula and your research using the UCT method of referencing. Use at least five readings in your essay. Thus, we expect to see at least five in-text references in the essay.
– List your references at the end of the essay using the UCT author-date referencing method.
