Estimating network effects and compatibility: Evidence from the Polish mobile market
I develop a structural demand model for mobile telephony that facilitates the identification of network effects and inter-network compatibility. Network effects are measured as the dependence of consumer willingness to pay on the installed base of subscribers, compatibility as the relative extent of cross- and own-network effects. Estimating the model using quarterly panel data from the Polish mobile telephone market for the period 1996-2001, I find strong network effects and, despite full interconnection of the mobile telephone networks, low compatibility. I also show that ignoring network effects leads to overestimation of demand elasticity.
Year of publication: |
2010
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Authors: | Grajek, Michal |
Published in: |
Information Economics and Policy. - Elsevier, ISSN 0167-6245. - Vol. 22.2010, 2, p. 130-143
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Publisher: |
Elsevier |
Keywords: | Structural econometric model Network effects Compatibility Mobile telephony |
Saved in:
Online Resource
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