Simulation of Merger in Mobile Telephony in Portugal

Lukasz Grzybowski and Pedro Pereira

No 06-22, Working Papers from NET Institute

Abstract: This article assesses the unilateral eects of a merger in the Portuguese mobile telephony market. We use aggregate quarterly data from 1999 to 2005 and a nested logit model to estimate the price elasticities of demand and the marginal costs of subscription to mobile services. We nd that mobile services provided by the rms in the market are close substitutes. Based on these estimates, we simulate the eects of the merger. The merger may result in substantial price increases, even in the presence of large cost eciencies.

Keywords: mobile telephony; merger simulation; network eects; lock in; nested logit (search for similar items in EconPapers)
JEL-codes: L13 L43 L93 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-dcm, nep-ind and nep-mic
Date: 2006-10, Revised 2006-10
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