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Willingness to Pay for Service Attributes in the Japanese Digital Content Market

We estimate a mixed logit demand model for the Japanese digital content market and measure willingness to pay for service attributes. We find that the willingness to pay for an extra unit of service quality ranges from 62 Yen to 83 Yen per month. Meanwhile, the switching cost, a measure of disutility from switching to other service providers is estimated as 340 Yen ($3) per month, which is approximately the same as the current monthly subscription fee.

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File URL: http://www.iuj.ac.jp/workingpapers/index.cfm?File=EMS_2006_14.pdf
File Function: First version, 2006
Download Restriction: no

Paper provided by Research Institute, International University of Japan in its series Working Papers with number EMS_2006_14.

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Length: 12 pages
Date of creation: Dec 2006
Date of revision:
Handle: RePEc:iuj:wpaper:ems_2006_14
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  1. Brownstone, David & Train, Kenneth, 1999. "Forecasting new product penetration with flexible substitution patterns," University of California Transportation Center, Working Papers qt1j6814b3, University of California Transportation Center.
  2. Lee, Jongsu & Kim, Yeonbae & Lee, Jeong-Dong & Park, Yuri, 2006. "Estimating the extent of potential competition in the Korean mobile telecommunications market: Switching costs and number portability," International Journal of Industrial Organization, Elsevier, vol. 24(1), pages 107-124, January.
  3. Klemperer, Paul, 1987. "Markets with Consumer Switching Costs," The Quarterly Journal of Economics, MIT Press, vol. 102(2), pages 375-94, May.
  4. Kenneth E. Train, 1998. "Recreation Demand Models with Taste Differences over People," Land Economics, University of Wisconsin Press, vol. 74(2), pages 230-239.
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