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Please use this identifier to cite or link to this item: http://hdl.handle.net/2451/28465

Title: Merger Simulation in Mobile Telephony in Portugal
Authors: Grzybowski, Lukasz - University of Alicante
Pereira, Pedro - Autoridade da Concorrencia
Keywords: mobile telephony, merger simulation, nested logit, network eects, lock-in
Issue Date: 2006
Series/Report no.: NET Institute Working Paper;06-22
Abstract: This article assesses the unilateral e ects on prices of a merger in the Portuguese mobile telephony market. We use aggregate quarterly data from 1999 to 2005 and a nested logit model to estimate the price elasticities of demand and the marginal costs of subscription of mobile telephony. Given these estimates, we simulate the e ects of the merger. We nd that the available mobile telephony subscription products are close substitutes. The merger may cause substantial price increases, even in the presence of large cost e ciencies. On average, prices increase by 7% without cost e ciencies, and by about 6% with a 10% marginal cost reduction.
URI: http://hdl.handle.net/2451/28465
Appears in Collections:NET Institute Working Papers Series

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