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Title: Cell Phone Demand and Consumer Learning - An Empirical Analysis
Authors: Gaynor, Martin - Carnegie Mellon University
Shi, Yunfeng - Carnegie Mellon University
Telang, Rahul - Carnegie Mellon University
Vogt, William - Carnegie Mellon University
Issue Date: 2005
Series/Report no.: NET Institute Working Paper;05-28
Abstract: A structural model is used in this paper to analyze the demand and learning behavior in cell phone market. We assume that the cell phone consumption can be divided into a high-value part and a low-value part. The consumers are assumed to be uncertain about the exogenous shock of the need for high-value usage and also their preferences over the low-value usage. Meanwhile, we assume that the consumers' knowledge improves over time. As a result, the match between their plan choice and consumption pattern becomes better. Such a learning behavior is supported by the data set. Bayesian updating is used to represent the learning. The estimates of the parameters are obtained and compared to the benchmarks from previous research.
Appears in Collections:NET Institute Working Papers Series

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