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Social networks and choice of mobile phone operator

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Abstract

The aim of this paper is to estimate the importance of (induced) network effects in the use of mobile telephones and the impact of the structure of social networks on a consumer's adoption decision. This is done using social network data obtained from a survey of second year undergraduate students at the University of Nottingham Business School. We find that students strongly coordinate their choice of mobile phone operators, but do this only for operators which charge a price difference between on- and off-net calls. Coordination is strongest within groups of students who frequently interact with each other, but weaker with students from outside their group. Furthermore, the students did not coordinate their choice of mobile handsets - there rather is a tendency to choose a different handset than the one used by their friends.

Suggested Citation

  • Daniel Birke & G. M. Peter Swann, 2005. "Social networks and choice of mobile phone operator," Occasional Papers 14, Industrial Economics Division.
  • Handle: RePEc:nub:occpap:14
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    File URL: http://www.nottingham.ac.uk/%7Elizecon/RePEc/pdf/networks.pdf
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    Cited by:

    1. Richard Lee & Jamie Murphy & Esther Swilley, 2008. "The moderating influence of hedonic consumption in an extended theory of planned behaviour," The Service Industries Journal, Taylor & Francis Journals, vol. 29(4), pages 539-555, February.
    2. Daniel Birke, 2009. "The Economics Of Networks: A Survey Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 23(4), pages 762-793, September.
    3. Harbord, David & Pagnozzi, Marco, 2008. "On-Net/Off-Net Price Discrimination and 'Bill-and-Keep' vs. 'Cost-Based' Regulation of Mobile Termination Rates," MPRA Paper 14540, University Library of Munich, Germany.
    4. Corrocher, Nicoletta & Zirulia, Lorenzo, 0. "Me and you and everyone we know: An empirical analysis of local network effects in mobile communications," Telecommunications Policy, Elsevier, vol. 33(1-2), pages 68-79, February.
    5. Tözer, Ayhan, 2010. "Assessment of First Comer Advantages and Network Effects; the Case of Turkish GSM Market," 21st European Regional ITS Conference, Copenhagen 2010: Telecommunications at new crossroads - Changing value configurations, user roles, and regulation 35, International Telecommunications Society (ITS).
    6. repec:eee:aumajo:v:16:y:2008:i:2:p:11-21 is not listed on IDEAS

    More about this item

    Keywords

    network effects; social networks; mobile telecommunications; discrete choice;

    JEL classification:

    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • 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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