Subscription Choices and Switching Costs in Mobile Telephony

Grzybowski, Lukasz; Pereira, Pedro

doi:10.2139/ssrn.1021324

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Subscription Choices and Switching Costs in Mobile Telephony

NET Institute Working Paper No. 07-12

27 Pages Posted: 13 Oct 2007

See all articles by Lukasz Grzybowski

Pedro Pereira

Autoridade da Concorrência; Instituto Universitário de Lisboa - ISCTE-IUL - Business Research Unit, BRU-IUL

Date Written: September 2007

Abstract

In this article, we estimate the price elasticities of demand for subscription and consumer switching costs for mobile telephony. We use a panel of Portuguese consumer level data to estimate a series of multinomial and mixed logit models. The demand for subscription is elastic. Switching costs are large. We use the structural model to perform several policy exercises. Switching costs and brand preferences are shown to be important elements of the market structure of mobile telephony. Price mediated network effects seem to be relatively less important.

Keywords: Mobile Telephony, Switching Costs, Mixed Logit

JEL Classification: L13, L43, L93

Suggested Citation: Suggested Citation

Grzybowski, Lukasz and Pereira, Pedro, Subscription Choices and Switching Costs in Mobile Telephony (September 2007). NET Institute Working Paper No. 07-12, Available at SSRN: https://ssrn.com/abstract=1021324 or http://dx.doi.org/10.2139/ssrn.1021324