A Simple Simulation Analysis of the Network Industry: The Case of the Japanese Mobile Telecommunications Market (2006.8)

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CPDP- 23-E (PDF:483KB)	"A Simple Simulation Analysis of the Network Industry: The Case of the Japanese Mobile Telecommunications Market" (2006.8) Mitsuru SUNADA(Competition Policy Research Center, Fair Trade Commission of Japan) This paper explicitly incorporates network effects into the antitrust logit model, where consumers are assumed to prefer a larger network, and the growth of network is expected to countervail the effects of price increase due to mergers. For illustrative purposes, the framework is applied to the Japanese mobile telecommunications market in order to simulate and assess the welfare effects of hypothetical mergers and entry. The results suggest that the level of network integration of merged carriers and the network size of entrants appears to affect the market outcome. JEL classification codes: D12, D43, L12, L13, L4, L96. Keywords: Logit Model; Network Effects; Mergers; Entry.

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Contents，Author

CPDP-
23-E
(PDF:483KB)

"A Simple Simulation Analysis of the Network Industry: The Case of the Japanese Mobile Telecommunications Market" (2006.8)
Mitsuru SUNADA(Competition Policy Research Center, Fair Trade Commission of Japan)
This paper explicitly incorporates network effects into the antitrust logit model, where consumers are assumed to prefer a larger network, and the growth of network is expected to countervail the effects of price increase due to mergers. For illustrative purposes, the framework is applied to the Japanese mobile telecommunications market in order to simulate and assess the welfare effects of hypothetical mergers and entry. The results suggest that the level of network integration of merged carriers and the network size of entrants appears to affect the market outcome.
JEL classification codes: D12, D43, L12, L13, L4, L96.
Keywords: Logit Model; Network Effects; Mergers; Entry.