Network effects with quality change: an empirical analysis of the Japanese mobile telecommunications market, 1995-2001

Mitsuru Sunada
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Mitsuru Sunada: Competition Policy Research Center, Japan Fair Trade Commission, Tokyo, Japan, Postal: Competition Policy Research Center, Japan Fair Trade Commission, Tokyo, Japan

Managerial and Decision Economics, 2008, vol. 29, issue 8, pages 657-674

Abstract: This study assesses the role of network effects under rapid quality change in the Japanese mobile telecommunications market by utilizing a simple framework based on a discrete choice model of product differentiation. The results indicate the existence of network effects in the Japanese mobile telecommunications market during the late 1990s and early 2000s. However, changes in the value of mobile telecommunications services mainly depend on quality changes; the contribution of network effects is negligible. Additionally, over time, network effects make a diminishing contribution to improving consumers' valuations. Copyright © 2008 John Wiley & Sons, Ltd.

Date: 2008
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Persistent link: http://EconPapers.repec.org/RePEc:wly:mgtdec:v:29:y:2008:i:8:p:657-674

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