EconPapers    
Economics at your fingertips  
 

Estimating Demand for Cellular Phone Service under Nonlinear Pricing

Ching-I Huang

MPRA Paper from University Library of Munich, Germany

Abstract: Cellular phone carriers typically offer complicated nonlinear tariffs. Consumers make a discrete choice among several rate plans. Each plan has a nonlinear price schedule, and price is usually lower for in-network calls. I present an empirical framework to estimate demand under such nonlinear pricing schemes by using parsimonious data and apply the estimation method to analyze the cellular phone service market in Taiwan. Based on the estimated model, I evaluate the impacts of termination-based pricing schemes on the market structure. While the existence of in-network discounts causes considerable tipping effects on market shares, the effects come primarily from reducing the average prices, not from the difference between in-network and off-network prices. There is no evidence showing that termination-based pricing by itself has significant effects on market structure.

Keywords: termination-based price discrimination; optional rate plans; cellular phone service; structural estimation (search for similar items in EconPapers)
JEL-codes: L96 L11 C35 L15 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dcm, nep-mic, nep-mkt and nep-net
Date: 2007-10
References: View references in EconPapers View complete reference list from CitEc
Citations: Track citations by RSS feed

Downloads: (external link)
https://mpra.ub.uni-muenchen.de/6459/1/MPRA_paper_6459.pdf original version (application/pdf)

Related works:
Journal Article: Estimating demand for cellular phone service under nonlinear pricing (2008) Downloads
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: https://EconPapers.repec.org/RePEc:pra:mprapa:6459

Access Statistics for this paper

More papers in MPRA Paper from University Library of Munich, Germany Ludwigstraße 33, D-80539 Munich, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Joachim Winter ().

 
Page updated 2019-12-01
Handle: RePEc:pra:mprapa:6459