Product Market Competition and Lobbying Coordination in the U.S. Mobile Telecommunications Industry
AbstractThis paper empirically investigates market behavior and firmsâ lobbying in a unified structural setup. In a sequential game, where firms lobby for regulation before they compete in the product market, we derive a testable measure of lobbying coordination. Applying the setting to the early U.S. cellular services industry, we find that lobbying expenditures, as measured by campaign contributions, and market conduct were consistent with a one-shot Nash equilibrium and that price caps were binding on average. Furthermore, campaign contributions from cellular firms effectively lowered the burden of the price caps and reduced production costs. ZUSAMMENFASSUNG - (Produktmarktwettbewerb und Koordination im Lobbying in der U.S. Mobilfunkindustrie) Dieses Paper untersucht Marktverhalten und Lobbying durch Unternehmen empirisch in einem vereinheitlichten strukturellen Ansatz. In einem sequentiellen Spiel, wo die Firmen fÃ¼r Regulierung Lobbyismus betreiben, bevor sie im Produktmarkt konkurrieren, leiten wir ein testbares MaÃ fÃ¼r Lobbying- Koordination her. In einer Anwendung auf den frÃ¼hen US Mobilfunkmarkt zeigen wir, dass Marktverhalten und Lobbying-Ausgaben (gemessen als Parteispenden) mit einem einfachen Nashgleichgewicht vereinbar sind und die Preisobergrenzen im Durchschnitt binden. AuÃerdem waren Parteispenden offenbar ein effektives Mittel um die Preisgrenzen zu lockern und kostenbezogene Regulierung abzumildern.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by Springer in its journal Journal of Industry, Competition and Trade.
Volume (Year): 12 (2012)
Issue (Month): 2 (June)
Contact details of provider:
Web page: http://springerlink.metapress.com/link.asp?id=105724
collusion; lobbying; price caps; regulation; rent-seeking; interest groups; telecommunications; D72; L13; L51; L96; C31;
Other versions of this item:
- Astrid Jung & Tomaso Duso, 2004. "Product Market Competition and Lobbying Coordination in the U.S. Mobile Telecommunications Industry," Vienna Economics Papers 0402, University of Vienna, Department of Economics.
- Astrid Jung & Tomaso Duso, 2003. "Product Market Competition and Lobbying Coordination in the U.S. Mobile Telecommunications Industry," CIG Working Papers SP II 2003-16, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
- C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Kishore Gawande & Usree Bandyopadhyay, 2000. "Is Protection for Sale? Evidence on the Grossman-Helpman Theory of Endogenous Protection," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 139-152, February.
- Grossman, G.M. & Helpman, E., 1992.
"Protection for Sale,"
21-92, Tel Aviv.
- Grossman, Gene & Helpman, Elhanan, 1993. "Protection for Sale," CEPR Discussion Papers 827, C.E.P.R. Discussion Papers.
- Gene M. Grossman & Elhanan Helpman, 1992. "Protection For Sale," NBER Working Papers 4149, National Bureau of Economic Research, Inc.
- Grossman, G.M. & Helpman, E., 1992. "Protection for Sale," Papers 162, Princeton, Woodrow Wilson School - Public and International Affairs.
- Roller, Lars-Hendrik & Sickles, Robin C., 2000.
"Capacity and product market competition: measuring market power in a 'puppy-dog' industry,"
International Journal of Industrial Organization,
Elsevier, vol. 18(6), pages 845-865, August.
- Lars-Hendrik Röller & Robin C. Sickles, 1997. "Capacity and Product Market Competition: Measuring Market Power in a "Puppy-Dog" Industry," CIG Working Papers FS IV 97-31, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- Besley, Timothy & Case, Anne, 2000.
"Unnatural Experiments? Estimating the Incidence of Endogenous Policies,"
Royal Economic Society, vol. 110(467), pages F672-94, November.
- Timothy Besley & Anne Case, 1994. "Unnatural Experiments? Estimating the Incidence of Endogenous Policies," NBER Working Papers 4956, National Bureau of Economic Research, Inc.
- Wales, T. J. & Woodland, A. D., 1983. "Estimation of consumer demand systems with binding non-negativity constraints," Journal of Econometrics, Elsevier, vol. 21(3), pages 263-285, April.
- Ludema, Rodney D., 2001. "Market collusion and the politics of protection," European Journal of Political Economy, Elsevier, vol. 17(4), pages 817-833, November.
- Tomaso Duso, 2001.
"Lobbying and Regulation in a Political Economy: Evidence from the US Cellular Industry,"
CIG Working Papers
FS IV 01-03, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- Tomaso Duso, 2005. "Lobbying and regulation in a political economy: Evidence from the U.S. cellular industry," Public Choice, Springer, vol. 122(3), pages 251-276, March.
- Theo Eicher & Thomas Osang, 2002. "Protection for Sale: An Empirical Investigation: Comment," American Economic Review, American Economic Association, vol. 92(5), pages 1702-1710, December.
- Corts, Kenneth S., 1998. "Conduct parameters and the measurement of market power," Journal of Econometrics, Elsevier, vol. 88(2), pages 227-250, November.
- Damania, Richard & Fredriksson, Per G., 2000. "On the formation of industry lobby groups," Journal of Economic Behavior & Organization, Elsevier, vol. 41(4), pages 315-335, April.
- David M. Kreps & Jose A. Scheinkman, 1983. "Quantity Precommitment and Bertrand Competition Yield Cournot Outcomes," Bell Journal of Economics, The RAND Corporation, vol. 14(2), pages 326-337, Autumn.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.