Modeling the Internet Price Behavior in Kenya-A System Dynamics Approach

This research aims to establish and model the dynamic relationships between the factors that define the behavior of Internet Pricing in Kenya. The methodology used is based on the System Dynamics framework which is a discipline that is used to understand and solve complex problems by breaking them into three components - Events, Patterns and Structures (Kirkwood, 2010). System Dynamics holds that addressing complex problems(events) requires one to identify their behavior (pattern) and establish the underlying Structures behind these problems. Long-term solutions that address the root causes of the problem can then be proposed given that behavior is a consequence of the underlying Structures. Using the ITU (2011) series of Internet Price data, this preliminary research builds and proposes an Internet Price Model that is driven by a goal-seeking Structure - whereby Telecommunication Operators seek to meet specific financial and operational targets within the constraints of competitive and regulatory pressures. The model presented offers Policy makers extra insights and provides policy touch-points - from where they can simulate and view the impact of various policy proposals that address the Internet Price problem.