An empirical model of the effects of “bill shock” regulation in mobile telecommunication markets

Chen, Jiawei; Jiang, Lai; Shah, Saad Andalib Syed

doi:10.1016/j.ijindorg.2022.102848

Cited by 3 publications

(1 citation statement)

References 18 publications

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“…The macro-effects of technology diffusion (approximated by the share of society having access to given technology) are entirely subjected to the telecommunication companies’ market expansion strategy, which is driven mostly by changes in individual preferences and demands. In many works, we find claims, see, for example, works of Geroski (2000) or Peres Núñez and Hilbert (2010), that emerging network externalities are the principal phenomenon driving the process of technology diffusion and determining its in-time dynamics of telecommunication markets (Chen et al ., 2022; Saleh and Saha, 2023). The network effects are analogous to the “imitation effect” (Bass, 1980), or the “domino effect” (Lee et al ., 2010).…”

Section: Contextual Settings and Literature Reviewmentioning

confidence: 99%

Network effects—do they matter for digital technologies diffusion?

Anacka,

Lechman

2023

JOCM

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PurposeThe main research target of this paper is to capture the network effects using the case of mobile cellular telephony, identified in European telecommunication markets, and its determinants enhancing the process of digital technologies diffusion.Design/methodology/approachThis research relies on panel and dynamic panel regression analysis. The empirical sample covers 30 European countries, and the period for the analysis is set for 2000–2019.FindingsThis work contributes by examining the network effects identified on European telecommunication markets that drive the process of digital technologies diffusion, but it also extends the understanding of the latter by tracing major determinants of fast network expansion, e.g. prices of access to and use of, per capita income, urbanisation, population density, accessibility of fixed telephony infrastructure. The main findings support the initial supposition that the installed base strongly enhances diffusion of new technologies, while other factors, for example, prices, are not of prime importance.Research limitations/implicationsThis research has certain managerial implications. The unveiled network effects driving adoption of technological innovations constitute a significant determinant of implementation of differentiation strategy by telecommunication companies. Due to network effects consumers' propensity to join the network is valued higher than the prices of services offered, which is crucial not only from the perspective of the company's pricing strategy but also enables telecommunication companies to introduce to the market new products and/or services concentrating on increasing its quality and usability rather than future prices.Originality/valueThis is the first work that empirically verifies the intercompanies and interpersonal diffusion of cellular telephony, hypothesising that this process relies on unique network effects.

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Section: Contextual Settings and Literature Reviewmentioning

confidence: 99%

Network effects—do they matter for digital technologies diffusion?

Anacka,

Lechman

2023

JOCM

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Optimization and analysis of three-part tariff pricing strategies

Lin

Merdikawati

et al. 2023

OR Spectrum

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Forgetful Consumers and Consumption Tracking

Bao,

Landry,

Shi

2024

Management Science

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We study the market consequences of advances in consumption tracking technologies—such as mobile banking apps that help consumers monitor their spending and avoid overdrawn accounts—using a two-period consumption model. In the model, consumers pay a penalty fee if they consume in both periods. In the second period, consumers may be forgetful of their first-period consumption, although the use of consumption tracking can remind them. According to our analysis, the availability of consumption tracking often helps consumers at the expense of the firm; such benefits may be direct, where consumers make use of the technology to avoid penalty fees, or indirect, where the mere availability of consumption tracking forces the firm to lower its penalty fee. If consumers are partially sophisticated regarding their forgetfulness, however, the availability of consumption tracking may instill a false sense of security in that consumers expect to use consumption tracking to avoid penalty fees but ultimately, decide not to bother, making them especially susceptible to penalty fees. In some cases, the availability of consumption tracking may actually compel a firm to impose a penalty fee that would not otherwise be viable, leading to higher profits and lower consumer surplus. As we show, this scenario is attained within an intermediate range of forgetfulness and at a level of (partial) sophistication for which consumers overestimate their demand for the technology. This paper was accepted by Dmitri Kuksov, marketing. Funding: M. Shi appreciates financial support from HKUST Yuk-Shee Chan Professorship Fund and China NSF [Grant 72272036]. Supplemental Material: The online appendix is available at https://doi.org/10.1287/mnsc.2023.00522 .

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An empirical model of the effects of “bill shock” regulation in mobile telecommunication markets

Cited by 3 publications

References 18 publications

Network effects—do they matter for digital technologies diffusion?

Network effects—do they matter for digital technologies diffusion?

Optimization and analysis of three-part tariff pricing strategies

Forgetful Consumers and Consumption Tracking

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