Measuring network effects in mobile telecommunications markets with stated-preference valuation methods
This paper demonstrates how stated-preference methods can be applied for modelling consumers' preferences in mobile telecommunications, and for measuring network effects. This will be illustrated with a case study of mobile phone operators in Poland. A random parameters multinomial logit model will be constructed to analyse consumer preferences. This approach allows calculating welfare effects, as well as marginal rates of substitution of the attributes used to describe the choices, such as operator brand and distribution of family and friends among available mobile networks. The results confirm the existence of a strong network effect, which is related to the size of the social network a particular subscriber belongs to, rather than the absolute size of the mobile operator's customer base. In addition, brand perception and brand loyalty will be identified as important determinants of operator choice. Finally, through the application of a non-market valuation method, monetary values of the network effect and of brand loyalty, will be calculated.
If 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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 2 (2011)
Issue (Month): 2 ()
|Contact details of provider:|| Web page: http://www.inderscience.com/browse/index.php?journalID==259 |
References listed on IDEAS
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.:
- Christos Genakos & Tommaso Valletti, 2007.
"Testing the "Waterbed" Effect in Mobile Telephony,"
CEP Discussion Papers
dp0827, Centre for Economic Performance, LSE.
- Christos Genakos & Tommaso Valletti, 2008. "Testing the “Waterbed” Effect in Mobile Telephony," CEIS Research Paper 110, Tor Vergata University, CEIS, revised 11 Jul 2008.
- Genakos, Christos D. & Valletti, Tommaso, 2009. "Testing the "Waterbed" Effect in Mobile Telephony," CEPR Discussion Papers 7611, C.E.P.R. Discussion Papers.
- Christos Genakos & Tommaso Valletti, 2007. "Testing the "waterbed" effect in mobile telephony," LSE Research Online Documents on Economics 19680, London School of Economics and Political Science, LSE Library.
- Christopher Knittel & Victor Stango, 2006.
"Strategic Incompatibility in ATM Markets,"
629, University of California, Davis, Department of Economics.
- Christopher R. Knittel & Victor Stango, 2006. "Strategic Incompatibility in ATM Markets," Working Papers 06-08, NET Institute, revised Sep 2006.
- Christopher R. Knittel & Victor Stango, 2006. "Strategic Incompatibility in ATM Markets," NBER Working Papers 12604, National Bureau of Economic Research, Inc.
- Hole, Arne Risa, 2008.
"Modelling heterogeneity in patients' preferences for the attributes of a general practitioner appointment,"
Journal of Health Economics,
Elsevier, vol. 27(4), pages 1078-1094, July.
- Arne Risa Hole, 2007. "Modelling Heterogeneity in Patients' Preferences for the Attributes of a General Practitioner Appointment," Working Papers 022cherp, Centre for Health Economics, University of York.
- Nick Hanley & Robert Wright & Vic Adamowicz, 1998. "Using Choice Experiments to Value the Environment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 11(3), pages 413-428, April.
- Colombo, Sergio & Calatrava-Requena, Javier & Conzalex-Roa, M.C., 2005. "Testing Choice Experiment for Benefit Transfer," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24747, European Association of Agricultural Economists.
- Erik Meijer & Jan Rouwendal, 2006.
"Measuring welfare effects in models with random coefficients,"
Journal of Applied Econometrics,
John Wiley & Sons, Ltd., vol. 21(2), pages 227-244.
- Meijer, E. & Rouwendal, J., 2000. "Measuring welfare effects in models with random coefficients," Research Report 00F25, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
- Brock, William A. & Durlauf, Steven N., 2007.
"Identification of binary choice models with social interactions,"
Journal of Econometrics,
Elsevier, vol. 140(1), pages 52-75, September.
- Brock,W.A. & Durlauf,S.N., 2004. "Identification of binary choice models with social interactions," Working papers 2, Wisconsin Madison - Social Systems.
- Stephen Hynes & Nick Hanley & Riccardo Scarpa, 2008. "Effects on Welfare Measures of Alternative Means of Accounting for Preference Heterogeneity in Recreational Demand Models," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(4), pages 1011-1027.
- Liikanen, Jukka & Stoneman, Paul & Toivanen, Otto, 2004. "Intergenerational effects in the diffusion of new technology: the case of mobile phones," International Journal of Industrial Organization, Elsevier, vol. 22(8-9), pages 1137-1154, November.
- Michal Grajek, 2007.
"Estimating network effects and compatibility in mobile telecommunications,"
ESMT Research Working Papers
ESMT-07-001, ESMT European School of Management and Technology.
- Michal Grajek, 2003. "Estimating Network Effects and Compatibility in Mobile Telecommunications," CIG Working Papers SP II 2003-26, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
- Laitila, Thomas, 2004. "Economic Valuation with Stated Preference Techniques: A Manual: Bateman, I.J., R.T. Carson, B. Day, M. Hanemann, N. Hanley, T. Hett, M. Jones-Lee, G. Loomes, S. Mourato, E. Ozdemiroglu, D.W. Pearce, R," Ecological Economics, Elsevier, vol. 50(1-2), pages 155-156, September.
- Scarpa, Riccardo & Rose, John M., 2008.
"Design efficiency for non-market valuation with choice modelling: how to measure it, what to report and why,"
Australian Journal of Agricultural and Resource Economics,
Australian Agricultural and Resource Economics Society, vol. 52(3), September.
- Riccardo Scarpa & John M. Rose, 2008. "Design efficiency for non-market valuation with choice modelling: how to measure it, what to report and why ," Australian Journal of Agricultural and Resource Economics, Australian Agricultural and Resource Economics Society, vol. 52(3), pages 253-282, 09.
- John M. Rose & Riccardo Scarpa, 2007. "Designs Efficiency for Non-market Valuation with Choice Modelling: How to Measure It, What to Report and Why," Working Papers in Economics 07/21, University of Waikato, Department of Economics.
- Kenneth Train, 2003. "Discrete Choice Methods with Simulation," Online economics textbooks, SUNY-Oswego, Department of Economics, number emetr2, September.
- Richard Carson & Nicholas Flores & Norman Meade, 2001.
"Contingent Valuation: Controversies and Evidence,"
Environmental & Resource Economics,
European Association of Environmental and Resource Economists, vol. 19(2), pages 173-210, June.
- Carson, Richard T & Flores, Nicholas A, 2000. "Contingent Valuation: Controversies and Evidence," University of California at San Diego, Economics Working Paper Series qt75k752s7, Department of Economics, UC San Diego.
- Christopher R. Knittel & Victor Stango, 2003.
"Compatibility and pricing with indirect network effects: evidence from ATMs,"
Working Paper Series
WP-03-33, Federal Reserve Bank of Chicago.
- Christopher Knittel & Victor Stango, 2005. "Compatibility and Pricing with Indirect Network Effects: Evidence from ATMs," Working Papers 525, University of California, Davis, Department of Economics.
- Christopher R. Knittel & Victor Stango, 2004. "Compatibility and Pricing with Indirect Network Effects: Evidence from ATMs," NBER Working Papers 10774, National Bureau of Economic Research, Inc.
- Train, K. & Weeks, M., 2004. "Discrete Choice Models in Preference Space and Willingness-to Pay Space," Cambridge Working Papers in Economics 0443, Faculty of Economics, University of Cambridge.
- Edward Morey & Jennifer Thacher & William Breffle, 2006. "Using Angler Characteristics and Attitudinal Data to Identify Environmental Preference Classes: A Latent-Class Model," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 34(1), pages 91-115, 05.
- David Dranove & Neil Gandal, 2003. "The Dvd-vs.-Divx Standard War: Empirical Evidence of Network Effects and Preannouncement Effects," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 12(3), pages 363-386, 09.
When requesting a correction, please mention this item's handle: RePEc:ids:ijmnec:v:2:y:2011:i:2:p:197-215. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Graham Langley)
If references are entirely missing, you can add them using this form.