Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/63813
Authors: 
Gao, Maija
Hyytinen, Ari
Toivanen, Otto
Year of Publication: 
2004
Series/Report no.: 
ETLA Discussion Papers, The Research Institute of the Finnish Economy (ETLA) 964
Abstract: 
Mobile phones are increasingly used as a gateway to the Internet. The take-up of mobile phone-enabled Internet services was, however, initially slower than expected, at least in Europe. We estimate non-parametrically the price elasticities of demand for first-generation wireless services using (i) consumerlevel panel data from a real world pricing experiment and (ii) the restrictions of a structural model. We decompose the number of wireless connections into the number of needs and the conditional probability of establishing a connection, given a need. According to our estimates needs were plenty, but the conditional usage probability small. Demand for first-generation wireless services was highly elastic and the welfare gains to an (early) adopter moderate. Pricing and taxation of wireless services had a large suppressing effect on demand
Subjects: 
Wireless internet
demand
new products
welfare
JEL: 
L11
D12
Document Type: 
Working Paper

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