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Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/28518
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| Title: | Quantifying the benefits of entry into local phone service |
| Authors: | Economides, Nicholas - NYU Stern School of Business
Seim, Katja - University of Pennsylvania
Viard, V. Brian - Cheung Kong Graduate School of Business |
| Issue Date: | 2007 |
| Series/Report no.: | NET Institute Working Paper;07-38 |
| Abstract: | Local telecommunications competition was an important goal of the 1996
Telecommunications Act. We evaluate the consumer welfare effects of
entry into residential local telephone service in New York State using
household-level data from September 1999 to March 2003. We address the
prevalence of nonlinear tariffs by developing a discrete/continuous
demand model that allows for service bundling and unobservable provider
quality. We find that the average subscriber to the entrants' services
gains a monthly equivalent of $2.33, or 6.2% of her bill, in welfare
from competition. These gains accrue primarily from firm differentiation
and new plan introductions rather than from price effects. |
| URI: | http://hdl.handle.net/2451/28518 |
| Appears in Collections: | NET Institute Working Papers Series
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