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Merger Simulation in Mobile Telephony in Portugal Author info | Abstract | Publisher info | Download info | Related research | Statistics Lukasz Grzybowski () (Competition Commission, UK )
Pedro Pereira () (Autoridade da Concorrencia )
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This article assesses the unilateral effects on prices of a merger in the Portuguese mobile telephony market. We use aggregate quarterly data from 1999 to 2005 and a nested logit model to estimate the price elasticities of demand and the marginal costs of subscription of mobile telephony. Given these estimates, we simulate the effects of the merger. We find that the available mobile telephony subscription products are close substitutes. The merger may cause substantial price increases, even in the presence of large cost efficiencies. On average, prices increase by 7-10% without cost efficiencies, and by about 6-10% with a 10% marginal cost reduction.
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Paper provided by NET Institute in its series Working Papers with number
07-12.
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Length: 24 pages
Date of creation: Sep 2007Date of revision:
Sep 2007Handle: RePEc:net:wpaper:0712Contact details of provider: Web page: http://www.NETinst.org/
For technical questions regarding this item, or to correct its listing, contact: (Nicholas Economides).
Keywords: lock-in ; merger simulation ; mobile telephony ; nested logit ; network effects ; Other versions of this item:
Find related papers by JEL classification: L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets L43 - Industrial Organization - - Antitrust Issues and Policies - - - Legal Monopolies and Regulation or Deregulation L93 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Air Transportation
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Pedro Pereira & José C. Pernías-Cerrillo, 2005.
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