Subscription Choices and Switching Costs in Mobile Telephony

Subscription Choices and Switching Costs in Mobile Telephony In this article, we estimate the price elasticities of demand for subscription and consumer switching costs for mobile telephony. We use a panel data of Portuguese consumers to estimate a series of multinomial and mixed logit models. The demand for subscription is found to be elastic and switching costs are large. We use the structural model to perform several policy exercises. Switching costs and brand preferences are shown to be important elements of the market structure of mobile telephony. Price mediated network effects seem to be relatively less important. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Industrial Organization Springer Journals

Subscription Choices and Switching Costs in Mobile Telephony

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Publisher
Springer US
Copyright
Copyright © 2011 by Springer Science+Business Media, LLC.
Subject
Economics; Industrial Organization; Microeconomics
ISSN
0889-938X
eISSN
1573-7160
D.O.I.
10.1007/s11151-011-9275-y
Publisher site
See Article on Publisher Site

Abstract

In this article, we estimate the price elasticities of demand for subscription and consumer switching costs for mobile telephony. We use a panel data of Portuguese consumers to estimate a series of multinomial and mixed logit models. The demand for subscription is found to be elastic and switching costs are large. We use the structural model to perform several policy exercises. Switching costs and brand preferences are shown to be important elements of the market structure of mobile telephony. Price mediated network effects seem to be relatively less important.

Journal

Review of Industrial OrganizationSpringer Journals

Published: Feb 1, 2011

References

  • State dependence at internet portals
    Goldfarb, A.
  • Estimating switching costs in mobile telephony in the UK
    Grzybowski, L.
  • Simulation of merger in mobile telephony in Portugal
    Grzybowski, L.; Pereira, P.
  • The consumer loss of the minimum duration for mobile telephone calls
    Grzybowski, L.; Pereira, P.

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