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Network effects with quality change: an empirical analysis of the Japanese mobile telecommunications market, 1995-2001

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  • Mitsuru Sunada

    (Competition Policy Research Center, Japan Fair Trade Commission, Tokyo, Japan)

Abstract

This study assesses the role of network effects under rapid quality change in the Japanese mobile telecommunications market by utilizing a simple framework based on a discrete choice model of product differentiation. The results indicate the existence of network effects in the Japanese mobile telecommunications market during the late 1990s and early 2000s. However, changes in the value of mobile telecommunications services mainly depend on quality changes; the contribution of network effects is negligible. Additionally, over time, network effects make a diminishing contribution to improving consumers' valuations. Copyright © 2008 John Wiley & Sons, Ltd.

Suggested Citation

  • Mitsuru Sunada, 2008. "Network effects with quality change: an empirical analysis of the Japanese mobile telecommunications market, 1995-2001," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 29(8), pages 657-674.
    • Handle: RePEc:wly:mgtdec:v:29:y:2008:i:8:p:657-674
    DOI: 10.1002/mde.1432
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    1. Van Hove, Leo, 2018. "Quantifying and interpreting network effects: ‘Own-network’ is not the same as ‘firm-level’," Information Economics and Policy, Elsevier, vol. 45(C), pages 47-51.

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