The Effect of Market Structure on Cellular Technology Adoption and Pricing
AbstractWe analyze the effect of entry on the technology adoption and calling plan choices of incumbent cellular firms. Focusing on the time period from 1996, when incumbents enjoyed a duopoly market, to 1998, when they faced increased competition from personal communications services (PCS) firms, we relate the adoption of digital technology and change in the breadth of calling plans to the amount of PCS entry experienced in different markets. Variation in geographic features contributes to the difficulty of building a sufficiently large wireless infrastructure network, providing effective instruments for endogenous entry decisions. Our results indicate that incumbents are more likely to upgrade their technology from analog to digital in markets with more entry. Consistent with increased digital technology adoption in more competitive markets, we find that incumbents in the process of digital upgrading also phase out a larger number of analog calling plans and introduce a larger number of digital calling plans in less concentrated markets.
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.
Bibliographic InfoPaper provided by Stanford University, Graduate School of Business in its series Research Papers with number 1876r.
Date of creation: May 2006
Date of revision:
Contact details of provider:
Postal: Stanford University, Stanford, CA 94305-5015
Phone: (650) 723-2146
Web page: http://gsbapps.stanford.edu/researchpapers/
More information through EDIRC
Find related papers by JEL classification:
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
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.:
- Wilson, Robert, 1997. "Nonlinear Pricing," OUP Catalogue, Oxford University Press, number 9780195115826.
- Eugenio J. Miravete, 2004.
"The Doubtful Profitability of Foggy Pricing,"
04-07, NET Institute.
- Daniel A. Ackerberg & Maristella Botticini, 1999.
"Endogenous Matching and the Empirical Determinants of Contract Form,"
0096, Boston University - Industry Studies Programme.
- Daniel A. Ackerberg & Maristella Botticini, 2002. "Endogenous Matching and the Empirical Determinants of Contract Form," Journal of Political Economy, University of Chicago Press, vol. 110(3), pages 564-591, June.
- Daniel A. Ackerberg & Maristella Botticini, 1999. "Endogenous Matching and the Empirical Determinants of Contract Form," Boston University - Institute for Economic Development 92, Boston University, Institute for Economic Development.
- Ackerberg, D.A. & Botticini, M., 1999. "Endogenous Matching and the Empirical Determinants of Contract Form," Papers 96, Boston University - Department of Economics.
- Oren, Shmuel S. & Smith, Stephen A. & Wilson, Robert B., 1983. "Competitive nonlinear tariffs," Journal of Economic Theory, Elsevier, vol. 29(1), pages 49-71, February.
- Steven T. Berry & Joel Waldfogel, 2001. "Do Mergers Increase Product Variety? Evidence From Radio Broadcasting," The Quarterly Journal of Economics, MIT Press, vol. 116(3), pages 1009-1025, August.
- Spulber, Daniel F., 1989. "Product variety and competitive discounts," Journal of Economic Theory, Elsevier, vol. 48(2), pages 510-525, August.
- Meghan R. Busse, 2000. "Multimarket Contact and Price Coordination in the Cellular Telephone Industry," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 9(3), pages 287-320, 06.
- Ron Borzekowski & Raphael Thomadsen & Charles Taragin, 2009.
"Competition and price discrimination in the market for mailing lists,"
Quantitative Marketing and Economics,
Springer, vol. 7(2), pages 147-179, June.
- Ron Borzekowski & Raphael Thomadsen & Charles Taragin, 2005. "Competition and price discrimination in the market for mailing lists," Finance and Economics Discussion Series 2005-56, Board of Governors of the Federal Reserve System (U.S.).
- Stole, Lars A, 1995. "Nonlinear Pricing and Oligopoly," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(4), pages 529-62, Winter.
- Miravete, Eugenio J & Röller, Lars-Hendrik, 2003. "Competitive Non-Linear Pricing in Duopoly Equilibrium: The Early US Cellular Telephone Industry," CEPR Discussion Papers 4069, C.E.P.R. Discussion Papers.
- Hoppe, Heidrun C, 2002. "The Timing of New Technology Adoption: Theoretical Models and Empirical Evidence," Manchester School, University of Manchester, vol. 70(1), pages 56-76, January.
- Gal-Or, Esther, 1988. "Oligopolistic nonlinear tariffs," International Journal of Industrial Organization, Elsevier, vol. 6(2), pages 199-221.
- Kutsal Dogan & Ernan Haruvy & Ram Rao, 2010. "Who should practice price discrimination using rebates in an asymmetric duopoly?," Quantitative Marketing and Economics, Springer, vol. 8(1), pages 61-90, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.