Product Market Competition and Lobbying Coordination in the U.S. Mobile Telecommunications Industry

University of Vienna Working Paper No. 0402

31 Pages Posted: 27 Apr 2004

See all articles by Tomaso Duso

Tomaso Duso

German Institute for Economic Research (DIW Berlin); TU Berlin- Faculty of Economics and Management - Empirical Industrial Organization

Astrid Jung

WZB Berlin Social Science Center

Date Written: March 2004

Abstract

This paper empirically investigates market behavior and firms' lobbying in a unified structural setup. In a sequential game, where firms lobby for regulation before they compete in the product market, we derive a testable measure of lobbying coordination. Applying the setting to the early U.S. cellular services industry, we find that lobbying expenditures, as measured by campaign contributions, and market conduct were consistent with a one-shot Nash equilibrium and that price caps were binding on average. Furthermore, campaign contributions from cellular firms effectively lowered the burden of the price caps and reduced production costs.

Keywords: Collusion, lobbying, price cap, regulation, rent-seeking, interest groups, telecommunication

JEL Classification: D72, L13, L51, L96, C31

Suggested Citation

Duso, Tomaso and Jung, Astrid, Product Market Competition and Lobbying Coordination in the U.S. Mobile Telecommunications Industry (March 2004). University of Vienna Working Paper No. 0402. Available at SSRN: https://ssrn.com/abstract=535903 or http://dx.doi.org/10.2139/ssrn.535903

Tomaso Duso (Contact Author)

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

Mohrenstra├če 58
Berlin, 10117
Germany

TU Berlin- Faculty of Economics and Management - Empirical Industrial Organization ( email )

Berlin, 10585
Germany

Astrid Jung

WZB Berlin Social Science Center ( email )

Reichpietschufer 50
D-10785 Berlin
Germany

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