American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
The Effect of Market Structure on Cellular Technology Adoption and Pricing
American Economic Journal: Microeconomics
vol. 3,
no. 2, May 2011
(pp. 221–51)
Abstract
We examine how structural changes in the mobile telecommunications industry between 1996, when local markets were duopolies, and 1998, when varying degrees of regulated entry had occurred, affected firms' product offerings and nonlinear pricing strategies. We relate firms' digital technology adoption and the characteristics of their calling plan menus to the amount of entry in local markets. We find that entry induces firms to offer larger menus with more evenly spread plans, both directly and by accelerating the introduction of digital menus with such features. Prices decline with entry, in particular for high-valuation consumers who benefit from steeper quantity discounts. (JEL L11, L13, L96, L98, O33)Citation
Seim, Katja, and V. Brian Viard. 2011. "The Effect of Market Structure on Cellular Technology Adoption and Pricing." American Economic Journal: Microeconomics, 3 (2): 221–51. DOI: 10.1257/mic.3.2.221Additional Materials
JEL Classification
- L11 Production, Pricing, and Market Structure; Size Distribution of Firms
- L13 Oligopoly and Other Imperfect Markets
- L96 Telecommunications
- L98 Industry Studies: Utilities and Transportation: Government Policy
- O33 Technological Change: Choices and Consequences; Diffusion Processes
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