The evolution of markets under entry and standards regulation -- the case of global mobile telecommunications
We analyze the effect of government policies on the evolution of global mobile telecommunications markets during 1981-1997. We obtain the following findings. (i) Countries that issue first licenses at later dates converge relatively slowly to early moving countries. (ii) The introduction of competition has a significant impact on the diffusion, especially after capacity expanded (digital phase). (iii) The timing at which second licenses are issued is important. Sequential entry is preceded by pre-emptive behavior and has a stronger impact than simultaneous entry. (iv) For the analogue technology, setting a single technological standard speeds up the diffusion. The results can be explained by structural characteristics of the industry, such as capacity constraints, consumer switching costs and network externalities.
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- Michael L. Katz & Carl Shapiro, 1994. "Systems Competition and Network Effects," Journal of Economic Perspectives, American Economic Association, vol. 8(2), pages 93-115, Spring. Full references (including those not matched with items on IDEAS)
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