Who Thinks about the Competition? Managerial Ability and Strategic Entry in US Local Telephone Markets

Goldfarb, Avi; Xiao, Mo

doi:10.2139/ssrn.1286240

Cited by 62 publications

(87 citation statements)

References 39 publications

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“…First, understanding the determinants of LLU entry is of independent interest, as it gives us insights into intra‐platform competition. This complements recent studies of inter‐platform competition in telecommunications markets, such as Greenstein and Mazzeo () and Xiao and Orazem (). Second, the entry model will be a key input to address our main research question, namely the effect of LLU on market performance (broadband penetration and quality).…”

Section: Llu Entrysupporting

confidence: 75%

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Unbundling the Incumbent: Evidence From Uk Broadband

Nardotto

Valletti

Verboven

2015

Journal of the European Economic Association

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We consider the impact of a regulatory process forcing an incumbent telecom operator to make its local broadband network available to other companies (local loop unbundling, or LLU). Entrants are then able to upgrade their individual lines and offer Internet services directly to customers. Employing a very detailed data set covering the whole of the United Kingdom, we find that, over the course of time, many entrants have begun to take advantage of unbundling. LLU entry only had a positive effect on broadband penetration in the early years, and no longer in the recent years as the market reached maturity. In contrast, LLU entry continues to have a positive impact on the quality of the service provided, as entrants differentiate their products upwards compared to the incumbent. We also assess the impact of competition from an alternative form of technology (cable) which is not subject to regulation, and what we discover is that inter‐platform competition has a positive impact on both penetration and quality.

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Section: Llu Entrysupporting

confidence: 75%

“…The following framework covers both cases. We extend the static free‐entry model of Bresnahan and Reiss (1991; henceforth BR) to a dynamic framework with sunk costs, as in Bresnahan and Reiss () and Xiao and Orazem () . Following Aguirregabiria (), one may interpret this as a “semi‐structural” dynamic model of free entry and exit.…”

Section: Llu Entrymentioning

confidence: 99%

Unbundling the Incumbent: Evidence From Uk Broadband

Nardotto

Valletti

Verboven

2015

Journal of the European Economic Association

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“…Sellers seem to systematically neglect competition. Critically, overconfidence depends on managerial abilities: more experienced, better educated managers tend to enter markets with fewer competitors, which leads to higher survival rates and higher revenues of their companies (Goldfarb & Xiao, 2011).…”

Section: Competition Neglectmentioning

confidence: 99%

Violations of rational choice principles in pricing decisions

Hinterhuber¹

2015

Industrial Marketing Management

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“…It is well known that outcomes in both single-agent problems (e.g., heterogeneous learning; see Narayanan and Manchanda 2009), and multiagent problems (e.g., incomplete information entry games; see Zhu and Singh 2009, Orhun 2010, Goldfarb and Xiao 2011 are very sensitive to the specification of agent's belief structures. A new literature obtains direct data on agents beliefs to relax strong assumptions such as rational expectations.…”

Section: Enriching Demand Models With Primary Datamentioning

confidence: 99%

Structural Workshop Paper—Discrete-Choice Models of Consumer Demand in Marketing

Chintagunta

Nair

2011

Marketing Science

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M arketing researchers have used models of consumer demand to forecast future sales, to describe and test theories of behavior, and to measure the response to marketing interventions. The basic framework typically starts from microfoundations of expected utility theory to obtain an econometric system that describes consumers' choices over available options, and to thus characterize product demand. The basic framework has been augmented significantly to account for quantity choices, to accommodate purchases of several products on a single purchase occasion (multiple discreteness and multicategory purchases), and to allow for asymmetric switching between brands across different price tiers. These extensions have enabled researchers to bring the analysis to bear on several related marketing phenomena of interest. This paper has three main objectives. The first objective is to articulate the main goals of demand analysis-forecasting, measurement, and testing-and to highlight several considerations associated with these goals. Our second objective is to describe the main building blocks of individual-level demand models. We discuss approaches built on direct and indirect utility specifications of demand systems, and we review extensions that have appeared in the marketing literature. The third objective is to explore a few emerging directions in demand analysis, including considering demand-side dynamics, combining purchase data with primary information, and using semiparametric and nonparametric approaches. We hope researchers new to this literature will take away a broader perspective on these models and see the potential for new directions in future research.

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Who Thinks about the Competition? Managerial Ability and Strategic Entry in US Local Telephone Markets

Cited by 62 publications

References 39 publications

Unbundling the Incumbent: Evidence From Uk Broadband

Unbundling the Incumbent: Evidence From Uk Broadband

Violations of rational choice principles in pricing decisions

Structural Workshop Paper—Discrete-Choice Models of Consumer Demand in Marketing

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