Games with unobservable heterogeneity and multiple equilibria: An application to mobile telecommunications

Mathieu Marcoux

No 2019-01, Cahiers de recherche from Universite de Montreal, Departement de sciences economiques

Abstract: To shed light on the limited success of competition enhancing policies in mobile telecommunications, I estimate a game of transceivers’ locations between national incumbents and a new entrant in Canada. I recover player-specific unobserved heterogeneity from bids for spectrum licenses 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’ drawbacks. I then evaluate the equilibrium effect of subsidizing the new entrant’s transceivers and find that this alternative proposition increases its investments while only slightly modifying incumbents’.

Keywords: Multiple equilibria; Unobserved heterogeneity; Empirical games; Telecommunications (search for similar items in EconPapers)
JEL-codes: C57 L11 (search for similar items in EconPapers)
Date: 2019-02
New Economics Papers: this item is included in nep-com, nep-gth and nep-reg
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Downloads: (external link)
http://hdl.handle.net/1866/21449

Related works:
Working Paper: Games with Unobservable Heterogeneity and Multiple Equilibria: An Application to Mobile Telecommunications (2019)
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Persistent link: https://EconPapers.repec.org/RePEc:mtl:montde:2019-01

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