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Intra-Household Effects on Demand for Telephone Service: Empirical Evidence

Ching-I Huang

MPRA Paper from University Library of Munich, Germany

Abstract: I present a game-theoretical model to estimate consumption demand, accounting for intra-household interaction among household members. Although multiple Nash equilibria of consumption decisions may exist in a household, model parameters are pointwise identified from household-level data for households with only two members. I propose a semiparametric maximum likelihood estimator and apply it to empirically analyze the subscription decision for cellular phone service in Taiwan. On average, a consumer's probability of subscribing to cellular service rises 35 percentage points when the other household member chooses to subscribe. This result suggests the existence of intra-household network effects on cellular phone consumption. The intra-household effect increases in household income, but decreases in the number of kids and the age difference in a household.

Keywords: consumption externality; multiple Nash equilibria; demand estimation; mobile phone service; cellular phone service; network effect (search for similar items in EconPapers)
JEL-codes: D13 D12 C35 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-mic and nep-net
Date: 2008-01
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Related works:
Journal Article: Intra-household effects on demand for telephone service: Empirical evidence (2013) Downloads
Journal Article: Intra-household effects on demand for telephone service: Empirical evidence (2013) Downloads
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