Quality-Adjusted Prices of Japanese Mobile Phone Handsets and Carriers’ Strategies

Quality-Adjusted Prices of Japanese Mobile Phone Handsets and Carriers’ Strategies In order to discuss oligopolists’ strategic determination of quality-adjusted prices (QAPs), we conducted a hedonic regression analysis using adjacent periods and estimated the QAPs of mobile phone handsets sold in Japan between 2002 and mid-2007 for each carrier. We observed (1) a decreasing trend in QAP for each carrier, (2) a more rapid decrease in the QAPs of the two smaller carriers’ handsets relative to that of the largest carrier, and (3) a turnover cycle of the QAPs between the two smaller carriers. If both small carriers decrease their QAPs at roughly the same time, neither will significantly increase their subscriber share, which can generate a turnover cycle of QAPs. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Quality-Adjusted Prices of Japanese Mobile Phone Handsets and Carriers’ Strategies

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Publisher
Springer Journals
Copyright
Copyright © 2010 by Springer Science+Business Media, LLC.
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-010-9253-9
Publisher site
See Article on Publisher Site

Abstract

In order to discuss oligopolists’ strategic determination of quality-adjusted prices (QAPs), we conducted a hedonic regression analysis using adjacent periods and estimated the QAPs of mobile phone handsets sold in Japan between 2002 and mid-2007 for each carrier. We observed (1) a decreasing trend in QAP for each carrier, (2) a more rapid decrease in the QAPs of the two smaller carriers’ handsets relative to that of the largest carrier, and (3) a turnover cycle of the QAPs between the two smaller carriers. If both small carriers decrease their QAPs at roughly the same time, neither will significantly increase their subscriber share, which can generate a turnover cycle of QAPs.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Jul 18, 2010

References

  • Price and quality of desktop and mobile personal computers: A quarter-century historical overview
    Berndt, E. R.; Rappaport, N. J.
  • Hedonic prices in the German market for mobile phones
    Dewenter, R.; Haucap, J.; Luther, R.; Rotzel, P.

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