Screening for Collective Dominance: The Case of the European Mobile Telecommunications

32 Pages Posted: 16 Aug 2011

See all articles by Veit Boeckers

Veit Boeckers

Metro AG

Justus Haucap

Heinrich Heine University Dusseldorf - Department of Economics; German Institute for Economic Research (DIW Berlin)

Ulrich Heimeshoff

Heinrich Heine University Dusseldorf

Date Written: August 14, 2011

Abstract

Competition authorities and regulatory bodies have increasingly made use of econometric and statistical methods in their analysis. Due to limitations of time and data, so-called screening methods have become more and more important in order to decide whether an in-depth inquiry is warranted. This paper uses a new econometric approache to screen selected European mobile telecommunications markets for collective dominance. First, we examine the dynamics of market structure by checking the stationarity of corresponding Her ndahl- Hirschman-indices. Second, we estimate Vector-Autoregressive models (VAR) taking entry or exit of competitors into account. If the market as characterized by collective dominance, the dominant operators should be able (by de nition) to act independently from their rivals. Hence, we should only nd Granger-causality from the dominant operators' series on their non-dominant rivals in that (hypothetical) case. However, we provide evidence that most operators' subscriber series cause each other. This can be interpreted as a sign of e ective competition between those operators. An examination of the Impulse-Response-functions supports the indication of the direction of causality.

Keywords: Collective Dominance, Screening, Time Series

JEL Classification: L13, L41, L96

Suggested Citation

Boeckers, Veit and Haucap, Justus and Heimeshoff, Ulrich, Screening for Collective Dominance: The Case of the European Mobile Telecommunications (August 14, 2011). Available at SSRN: https://ssrn.com/abstract=1909545 or http://dx.doi.org/10.2139/ssrn.1909545

Veit Boeckers

Metro AG ( email )

Metro-Straße 1
Düsseldorf, 40235
Germany

Justus Haucap

Heinrich Heine University Dusseldorf - Department of Economics ( email )

Duesseldorf
Germany

HOME PAGE: http://www.dice.uni-duesseldorf.de

German Institute for Economic Research (DIW Berlin) ( email )

Mohrenstraße 58
Berlin, 10117
Germany

Ulrich Heimeshoff (Contact Author)

Heinrich Heine University Dusseldorf ( email )

Universitaetsstr. 1
Duesseldorf, DE NRW 40225
Germany

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