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Market Entry, Fighting Brands and Tacit Collusion: Evidence from the French Mobile Telecommunications Market

Author

Listed:
  • Marc Bourreau

    (ECOGE - Economie Gestion - I3 SES - Institut interdisciplinaire de l’innovation de Telecom Paris - Télécom Paris - IMT - Institut Mines-Télécom [Paris] - IP Paris - Institut Polytechnique de Paris - I3 - Institut interdisciplinaire de l’innovation - CNRS - Centre National de la Recherche Scientifique, SES - Département Sciences Economiques et Sociales - Télécom Paris - IMT - Institut Mines-Télécom [Paris] - IP Paris - Institut Polytechnique de Paris)

  • Yutec Sun
  • Frank Verboven

Abstract

We study a major new entry in the French mobile telecommunications market, followed by the introduction of fighting brands by the three incumbents. Using an empirical oligopoly model, we find that the incumbents' fighting brand strategies are difficult to rationalize as unilateral best responses. Instead, their strategies are consistent with a breakdown of tacit semi-collusion: before entry, the incumbents could successfully coordinate on restricting product variety to avoid cannibalization; after entry, this outcome became harder to sustain because of increased business stealing incentives. Consumers gained considerably from the added variety and, to a lesser extent, from the incumbents' price responses.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Marc Bourreau & Yutec Sun & Frank Verboven, 2021. "Market Entry, Fighting Brands and Tacit Collusion: Evidence from the French Mobile Telecommunications Market," Post-Print halshs-03352449, HAL.
    • Handle: RePEc:hal:journl:halshs-03352449
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    Citations

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    Cited by:

    1. Yang, Shengxing & Vialle, Pierre & Whalley, Jason, 2022. "Is disruption the second time around harder to do? The entry of Iliad into the Italian telecommunications market," 31st European Regional ITS Conference, Gothenburg 2022: Reining in Digital Platforms? Challenging monopolies, promoting competition and developing regulatory regimes 265674, International Telecommunications Society (ITS).
    2. Mathilde Aubouin & Paolo Melindi-Ghidi & Jean-Philippe Nicolaï, 2025. "Complementarity in Household Expenditures on Fixed and Mobile Internet in France," Annals of Economics and Statistics, GENES, issue 159, pages 143-174.
    3. Enghin Atalay & Alan Sorensen & Christopher Sullivan & Wanjia Zhu, 2024. "Product Repositioning by Merging Firms," Journal of Industrial Economics, Wiley Blackwell, vol. 72(2), pages 868-908, June.
    4. Takeshi Fukasawa, 2025. "When do firms sell high durability products? The case of light bulb industry," Papers 2503.23792, arXiv.org, revised May 2025.
    5. repec:ags:aaea22:343800 is not listed on IDEAS
    6. Edmond Baranes & Hung Cuong Vuong, 2023. "Economic contribution to the debate on cost sharing policy," Post-Print hal-05111081, HAL.
    7. Kandelhardt, Johannes, 2023. "Flexible estimation of random coefficient logit models of differentiated product demand," DICE Discussion Papers 399, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    8. repec:ags:aaea22:343858 is not listed on IDEAS
    9. Steinbach, Sandro & Graziano, Marcello & Connolly, Cristina, 2024. "David versus Goliath: The Impact of Corporate Expansion in the Alcohol Retail Industry on Small-Scale Retailers," 2024 Annual Meeting, July 28-30, New Orleans, LA 343800, Agricultural and Applied Economics Association.
    10. Marcoux, Mathieu, 2022. "Strategic interactions in mobile network investment with a new entrant and unobserved heterogeneity," International Journal of Industrial Organization, Elsevier, vol. 82(C).
    11. Marc Bourreau & Yutec Sun, 2022. "Competition and Quality: Evidence from the Entry of Mobile Network Service," Working Papers 22-04, NET Institute.
    12. repec:ags:aaea22:335481 is not listed on IDEAS
    13. Martin, Simon & Schmal, W. Benedikt, 2021. "Collusive compensation schemes aided by algorithms," DICE Discussion Papers 375, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    14. Shengxing Yang & Pierre Vialle & Jason Whalley, 2022. "Is disruption the second time around harder to do? The entry of Iliad into the Italian telecommunications market," Post-Print hal-05284642, HAL.
    15. Yang, Shengxing & Vialle, Pierre & Whalley, Jason, 2025. "Is disruption the second time around easier? The case of Iliad and the Italian telecommunications market," Telecommunications Policy, Elsevier, vol. 49(8).
    16. Steinbach, Sandro, 2023. "The Corporatization of Veterinary Medicine: An Empirical Analysis of Its Impact on Independent Practices," 2023 Annual Meeting, July 23-25, Washington D.C. 335481, Agricultural and Applied Economics Association.
    17. Pál, László & Sándor, Zsolt, 2023. "Comparing procedures for estimating random coefficient logit demand models with a special focus on obtaining global optima," International Journal of Industrial Organization, Elsevier, vol. 88(C).

    More about this item

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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