Strategic interactions in mobile network investment with a new entrant and unobserved heterogeneity

Mathieu Marcoux

International Journal of Industrial Organization, 2022, vol. 82, issue C

Abstract: I estimate a game of mobile network investment between national incumbents and a new entrant to shed light on the limited success of competition enhancing policies in Canada. I recover player-specific unobserved heterogeneity from bids for spectrum licences to address the unavailability of regressors required to identify incumbents’ responses to the new entrant’s decisions. I find that incumbents benefitting from important economies of density is a plausible explanation for policies’ limitations. I then evaluate the equilibrium effect of subsidizing the new entrant’s transceivers and find that this counterfactual policy increases its investment while only slightly modifying incumbents’.

Keywords: Unobserved heterogeneity; Empirical games; Telecommunications (search for similar items in EconPapers)
JEL-codes: C57 L11 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:82:y:2022:i:c:s0167718722000054

DOI: 10.1016/j.ijindorg.2022.102829

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