Economics at your fingertips  

Delineating markets for bundles with consumer level data: The case of triple-play

Pedro Pereira, Tiago Ribeiro and João Vareda

International Journal of Industrial Organization, 2013, vol. 31, issue 6, 760-773

Abstract: The question of whether bundles of telecommunication services are relevant product markets is addressed. As a first step, demand for bundles of services, as well as the associated services, is modeled as a discrete choice problem with a potentially large number of products. A unique invoice based consumer level data set from Portuguese telecommunications firms is collected. This choice based data set is combined with survey data to characterize the market shares of all potential combinations of services available. Several discrete choice models are estimated. A Cross-Nested logit model is the most parsimonious description of the substitution patterns between the large number of products available. The demand model used, coupled with the definition of choice alternatives proposed, generates flexible substitution patterns, which produce reasonable price elasticities of demand. The demand for triple-play products is elastic, with own-price elasticities for the larger firms ranging between 3.2 and 1.3, and a market own-price elasticity of 1.4. Some of the products analyzed are found to be complementary. Our results indicate that triple-play bundles are a relevant product market.

Keywords: Bundles; Relevant market; Triple-play; Consumer level data (search for similar items in EconPapers)
JEL-codes: D43 K21 L44 L96 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (8) Track citations by RSS feed

Downloads: (external link)
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Access Statistics for this article

International Journal of Industrial Organization is currently edited by P. Bajari, B. Caillaud and N. Gandal

More articles in International Journal of Industrial Organization from Elsevier
Bibliographic data for series maintained by Dana Niculescu ().

Page updated 2019-04-13
Handle: RePEc:eee:indorg:v:31:y:2013:i:6:p:760-773