The Effect of Market Structure on Cellular Technology Adoption and Pricing

Katja Seim and V. Brian Viard

American Economic Journal: Microeconomics, 2011, vol. 3, issue 2, pages 221-51

Abstract: We examine how structural changes in the mobile telecommunications industry between 1996, when local markets were duopolies, and 1998, when varying degrees of regulated entry had occurred, affected firms' product offerings and nonlinear pricing strategies. We relate firms' digital technology adoption and the characteristics of their calling plan menus to the amount of entry in local markets. We find that entry induces firms to offer larger menus with more evenly spread plans, both directly and by accelerating the introduction of digital menus with such features. Prices decline with entry, in particular for high-valuation consumers who benefit from steeper quantity discounts. (JEL L11, L13, L96, L98, O33)

JEL-codes: L11 L13 L96 L98 O33 (search for similar items in EconPapers)
Date: 2011
Note: DOI: 10.1257/mic.3.2.221
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