We examine how structural changes in the mobile telecommunications industry between 1996, when local markets were duopolies, and 1998, when varying degrees of regulated entry had occurred,
affected firms' product offerings and nonlinear pricing strategies. We relate firms' digital technology adoption and the characteristics of their calling plan menus to the amount of entry in local markets. We find that entry induces firms to offer larger menus with more evenly spread plans, both directly and by accelerating the introduction of digital menus with such features. Prices decline with entry, in particular for high-valuation consumers who benefit from steeper quantity discounts. (JEL L11, L13, L96, L98, O33)
Seim, Katja, and V. Brian Viard.
"The Effect of Market Structure on Cellular Technology Adoption and Pricing."
American Economic Journal: Microeconomics,
Production, Pricing, and Market Structure; Size Distribution of Firms
Oligopoly and Other Imperfect Markets
Industry Studies: Utilities and Transportation: Government Policy
Technological Change: Choices and Consequences; Diffusion Processes