RT Journal Article
T1 Entry, Costs Reduction, and Competition in the Portuguese Mobile Telephony Industry
A1 Gagnepain, Philippe
A1 Pereira, Pedro
AB We study the effect of entry on costs and competition in the Portuguese mobile telephony industry. We construct and estimate a model that includes demand, network, and cost equations. The latter accounts for inefficiency and cost reducing effort. Our results suggest that the entry of a third operator in 1998 lead to significant cost reductions and fostered competition. We also show that failure to account for cost reducing effort leads to biased estimates of competition in the industry. Finally, we also find that our estimated price–cost margins are similar to hypothetical Nash margins, if firms are patient and have optimistic beliefs about the industry growth.
PB Elsevier
SN 0167-7187
YR 2007
FD 2007
LK https://hdl.handle.net/10016/5037
UL https://hdl.handle.net/10016/5037
LA eng
NO Ministerio de Educación y Ciencia (SEJ2004-00670)
DS e-Archivo
RD 20 may. 2024