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Network effects with quality change: an empirical analysis of the Japanese mobile telecommunications market, 1995-2001

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  • Mitsuru Sunada

    (Competition Policy Research Center, Japan Fair Trade Commission, Tokyo, Japan)

Abstract

This study assesses the role of network effects under rapid quality change in the Japanese mobile telecommunications market by utilizing a simple framework based on a discrete choice model of product differentiation. The results indicate the existence of network effects in the Japanese mobile telecommunications market during the late 1990s and early 2000s. However, changes in the value of mobile telecommunications services mainly depend on quality changes; the contribution of network effects is negligible. Additionally, over time, network effects make a diminishing contribution to improving consumers' valuations. Copyright © 2008 John Wiley & Sons, Ltd.

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File URL: http://hdl.handle.net/10.1002/mde.1432
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Bibliographic Info

Article provided by John Wiley & Sons, Ltd. in its journal Managerial and Decision Economics.

Volume (Year): 29 (2008)
Issue (Month): 8 ()
Pages: 657-674

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Handle: RePEc:wly:mgtdec:v:29:y:2008:i:8:p:657-674

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Web page: http://www3.interscience.wiley.com/cgi-bin/jhome/7976

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  1. Iimi, Atsushi, 2005. "Estimating demand for cellular phone services in Japan," Telecommunications Policy, Elsevier, vol. 29(1), pages 3-23, February.
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  10. Okada, Yosuke & Hatta, Keiko, 1999. "The Interdependent Telecommunications Demand and Efficient Price Structure," Journal of the Japanese and International Economies, Elsevier, vol. 13(4), pages 311-335, December.
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  12. Gandal, Neil, 1995. "Competing Compatibility Standards and Network Externalities in the PC Software Market," The Review of Economics and Statistics, MIT Press, vol. 77(4), pages 599-608, November.
  13. Aviv Nevo, 2000. "A Practitioner's Guide to Estimation of Random-Coefficients Logit Models of Demand," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 9(4), pages 513-548, December.
  14. Berry, Steven & Levinsohn, James & Pakes, Ariel, 1995. "Automobile Prices in Market Equilibrium," Econometrica, Econometric Society, vol. 63(4), pages 841-90, July.
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