Abstract
We develop a model of competition in prices and infrastructure among mobile network operators. Although consolidation increases market power, it can lead to more efficient data transmission due to economies of scale, which we derive from physical principles. After estimating our model with French consumer and infrastructure data, equilibrium simulations reveal that while prices decrease with the number of firms, so do download speeds. Our framework also allows us to quantify the impact of spectrum allocation. The marginal social value of spectrum exceeds firms’ willingness to pay in our model as well as observed prices in spectrum auctions.
Keywords
Market structure; scale efficiency,; antitrust policy; infrastructure; endogenous; quality; queuing, mobile telecommunications;
JEL codes
- D22: Firm Behavior: Empirical Analysis
- L13: Oligopoly and Other Imperfect Markets
- L40: General
Replaces
Jonathan Elliott, Georges Vivien Houngbonon, Marc Ivaldi, and Paul Scott, “Market Structure, Investment and Technical Efficiencies in Mobile Telecommunications”, TSE Working Paper, n. 21-1207, May 2021, revised April 25, 2023.
Reference
Jonathan Elliott, Georges Vivien Houngbonon, Marc Ivaldi, and Paul Scott, “Market Structure, Investment and Technical Efficiencies in Mobile Telecommunications”, Journal of Political Economy, June 2024, forthcoming.
See also
Published in
Journal of Political Economy, June 2024, forthcoming