Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/96590
Authors: 
Grajek, Michał
Kretschmer, Tobias
Year of Publication: 
2010
Series/Report no.: 
ESMT Working Paper 08-004 (R1)
Abstract: 
Critical Mass is a common feature of technology diffusion processes. We develop a structural model of demand with network effects to provide a rigorous definition of critical mass as a function of installed base, price and network effects. Using data from the digital cellular telephony market, we identify critical mass phenomena and find that differences in the critical mass point in different countries rest mainly on different countries' socioeconomic characteristics and the extent of competition in a country. This application illustrates that our demand model can be operationalized easily and can generate theoretically grounded empirical insights about critical mass phenomena.
Subjects: 
critical mass
network effects
technology diffusion
cellular telephony
JEL: 
C53
L14
M37
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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