The size of the critical mass as a function of the strength of network externalities: a mobile telephone estimation
The amount of financial incentives required to stimulate network growth depends on the size of the critical mass which, in its turn, depends on the intensity with which network externalities play their role in the diffusion process. The measurement of the strength of network effects and all that can enforce or depress them is fundamental for forecasting the diffusion of new goods. Looking at the mobile telephone network for the OECD countries surveyed between 1989 and 2006, we propose a new methodology which allows us to estimate the size of the critical mass through the estimation of the parameters which determines the concavity degree of the inverse demand curve for mobiles. We found that socio-demographic variables, as well as variables which proxy the efficiency of fixed-line operators or the availability and cost of alternative services, affect the strength of network effects and, therefore, the critical mass size.
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): 21 (2012)
Issue (Month): 4 (June)
|Contact details of provider:|| Web page: http://www.tandfonline.com/GEIN20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/GEIN20|
When requesting a correction, please mention this item's handle: RePEc:taf:ecinnt:v:21:y:2012:i:4:p:373-396. 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: (Michael McNulty)
If references are entirely missing, you can add them using this form.