If the producers refuse to drop prices when thy can, then the first person to break into the market doing something different will get crazy profits Market ent

If the producers refuse to drop prices when thy can, then the first person to break into the market doing something different will get crazy profits Market entry is difficult because it's gated by spectrum availability. It's hard for new competitors to offer wireless services. The market for wireless services in most countries is very cozy - it's usually one or two incumbent carriers that are about the same size, own about the same amount of spectrum, and don't work very hard to take market share from each other. I would argue that in a lot of cases, wireless services markets are stuck in a Nash equilibrium. Smart regulation that might fix this would be to outlaw service contracts and cancellation fees to allow consumers to exploit pricing 'mistakes' (which is how you'd break a Nash equilibrium), and maybe force the carriers to re-bid on their spectrum every 5 years. Unfortunately another common problem with wireless services is regulatory capture - in my country, all the regulators who watch the wireless industry also end up working for it.