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Network effects, network structure and consumer interaction in mobile telecommunications in Europe and Asia

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  • Daniel Birke

    (Aston Business School - Aston Business School)

Abstract

This paper estimates the importance of (tariff-mediated) network effects and the impact of a consumer's social network on her choice of mobile phone provider. The study uses network data obtained from surveys of students in several European and Asian countries. We use the Quadratic Assignment Procedure, a non-parametric permutation test, to adjust for the particular error structure of network data. We find that respondents strongly coordinate their choice of mobile phone providers, but only if their provider induces network effects. This suggests that this coordination depends on network effects rather than on information contagion or pressure to conform to the social environment.

Suggested Citation

  • Daniel Birke, 2010. "Network effects, network structure and consumer interaction in mobile telecommunications in Europe and Asia," Post-Print hal-00870187, HAL.
    • Handle: RePEc:hal:journl:hal-00870187
    DOI: 10.1016/j.jebo.2010.06.005
    Note: View the original document on HAL open archive server: https://hal.science/hal-00870187
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    Citations

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    Cited by:

    1. Grzybowski, Lukasz, 2015. "The role of network effects and consumer heterogeneity in the adoption of mobile phones: Evidence from South Africa," Telecommunications Policy, Elsevier, vol. 39(11), pages 933-943.
    2. Clavijo, R, 2022. "Price discrimination under nonuniform calling circles and call externalities," Documentos de Trabajo 20054, Universidad del Rosario.
    3. Paolo Zeppini & Koen Frenken, 2015. "Networks, Percolation, and Demand," Department of Economics Working Papers 38/15, University of Bath, Department of Economics.
    4. Daniel Björkegren, 2017. "Scoping for: Competition in Network Industries: Evidence from Mobile Telecommunications in Rwanda," Working Papers 17-10, NET Institute.
    5. repec:lmu:msmdpa:12688 is not listed on IDEAS
    6. Quach, Sara & Thaichon, Park & Hewege, Chandana, 2020. "Triadic relationship between customers, service providers and government in a highly regulated industry," Journal of Retailing and Consumer Services, Elsevier, vol. 55(C).
    7. Mothobi, Onkokame & Grzybowski, Lukasz, 2017. "Infrastructure deficiencies and adoption of mobile money in Sub-Saharan Africa," Information Economics and Policy, Elsevier, vol. 40(C), pages 71-79.
    8. Basaran, Alparslan A. & Cetinkaya, Murat & Bagdadioglu, Necmiddin, 2014. "Operator choice in the mobile telecommunications market: Evidence from Turkish urban population," Telecommunications Policy, Elsevier, vol. 38(1), pages 1-13.
    9. Jinping Lin & Kangmin Wu, 2023. "Intercity asymmetrical linkages influenced by Spring Festival migration and its multivariate distance determinants: a case study of the Yangtze River Delta Region in China," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-10, December.
    10. Karacuka, Mehmet & Çatık, A. Nazif & Haucap, Justus, 2013. "Consumer choice and local network effects in mobile telecommunications in Turkey," Telecommunications Policy, Elsevier, vol. 37(4), pages 334-344.
    11. Confraria, João & Ribeiro, Tiago & Vasconcelos, Helder, 2017. "Analysis of consumer preferences for mobile telecom plans using a discrete choice experiment," Telecommunications Policy, Elsevier, vol. 41(3), pages 157-169.
    12. Guven, Faruk, 2018. "Churn and loyalty behaviour of Turkish digital natives," 29th European Regional ITS Conference, Trento 2018 184943, International Telecommunications Society (ITS).
    13. Zucchini, Leon & Claussen, Jörg & Trüg, Moritz, 2013. "Tariff-mediated network effects versus strategic discounting: Evidence from German mobile telecommunications," International Journal of Industrial Organization, Elsevier, vol. 31(6), pages 751-759.
    14. Harbord, David & Pagnozzi, Marco, 2008. "On-Net/Off-Net Price Discrimination and 'Bill-and-Keep' vs. 'Cost-Based' Regulation of Mobile Termination Rates," MPRA Paper 14540, University Library of Munich, Germany.
    15. repec:lmu:msmdpa:13764 is not listed on IDEAS

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    More about this item

    Keywords

    network effects; social networks; mobile telecommunications; QAP; C14; D12; L14; L96;
    All these keywords.

    JEL classification:

    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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