Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/96552
Authors: 
Grajek, Michał
Year of Publication: 
2007
Series/Report no.: 
ESMT Working Paper 07-001
Abstract: 
I develop a structural demand model for mobile telephone service, which facilitates the identification of network effects and compatibility between networks. Network effects are measured by the dependence of consumer willingness to pay on the installed base of subscribers. Compatibility is measured by the relative extent of cross- and own-network effects. I then estimate the model using quarterly panel data from the Polish mobile telephone industry from 1996-2001 and find strong network effects and - despite full interconnection of the mobile telephone networks - low compatibility. I also show that ignoring network effects leads to an overestimation of elasticity of demand.
Subjects: 
Structural Econometric Model
Network Effects
Compatibility
Mobile Telecommunications
JEL: 
C51
D12
L96
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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