Me and you and everyone we know: an empirical analysis of local network effects in mobile communications
AbstractThis paper aims at investigating the importance that consumers assign to local network effects (i.e. the extent to which they take into account their contacts’ operators in determining their choices) and at identifying which individual characteristics affect consumers’ preferences in relation to local network effects. Based on a sample of 193 Italian students, we find that consumers are highly heterogeneous with respect to the evaluation of the importance of their friend/family’s operator when choosing their own provider, and that such heterogeneity is associated to specific characteristics related to individual innovativeness and patterns of mobile phone usage. In particular, consumers who are more interested in local network effects are typically sophisticated users, who use intensively voice services and who are early adopters. Interestingly, consumers who pay attention to local network effects end up spending relatively little in proportion to their intensity of use.
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Bibliographic InfoPaper provided by The Rimini Centre for Economic Analysis in its series Working Paper Series with number 03-08.
Date of creation: Jan 2008
Date of revision: Jan 2008
Other versions of this item:
- Corrocher, Nicoletta & Zirulia, Lorenzo, 0. "Me and you and everyone we know: An empirical analysis of local network effects in mobile communications," Telecommunications Policy, Elsevier, vol. 33(1-2), pages 68-79, February.
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- Muck, Johannes, 2012. "The effect of on-net / off-net differentiation and heterogeneuous consumers on network size in mobile telecommunications : an agent-based aporoach," 23rd European Regional ITS Conference, Vienna 2012 60355, International Telecommunications Society (ITS).
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