Enterprise in orbit: The supply of communication satellites
This study develops a general understanding of the evolution of the Western World commercial communication sate-llite supply industry. Initial information classifies this industry as an oligopoly with the vendors as price setters. Over three generations, the technical attributes of communication satellites are advancing. Taking the hedonic regression approach, the customer's willingness to pay for characteristics is calculated. Exploring the relationship between price and complexity, it is demonstrated that in the short run, the oligopoly structure of this industry is accompanied by a simple form of cost plus price setting, whereas in the long run, the engineering satellite pricing 'rule of thumb' applies.
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Volume (Year): 15 (2006)
Issue (Month): 7 ()
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- Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
- Robert J. Gordon, 1987. "The Postwar Evolution of Computer Prices," NBER Working Papers 2227, National Bureau of Economic Research, Inc.
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