Games with Unobservable Heterogeneity and Multiple Equilibria: An Application to Mobile Telecommunications

Mathieu Marcoux

No 01-2019, Cahiers de recherche from Centre interuniversitaire de recherche en économie quantitative, CIREQ

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, nep-pay and nep-reg
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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:montec:01-2019

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