Gupta, Abhay (2007): Measuring Quality Change due to Technological Externality in Multi-Feature Service Bundles.
Preview |
PDF
MPRA_paper_9284.pdf Download (201kB) | Preview |
Abstract
Technological innovation, externalities and network effects keep shifting the preference parameters in cellular telecommunication service sector. The paper suggests a framework to model these changes.It notes two channels that affect the service prices (in possibly opposite ways). In each corresponding period, consumer with lower reservation prices are shopping for the services. But these reservation prices are going up due to complementarity/ network effects.
Under some reasonable assumptions on industry and cost structure, market data can be used to identify these changes. A price index is suggested that decomposes service bundle price changes into the change in price for same-quality of service and change in quality of the service bundle. Some interesting properties of these indexes are also discussed.
Item Type: | MPRA Paper |
---|---|
Original Title: | Measuring Quality Change due to Technological Externality in Multi-Feature Service Bundles |
Language: | English |
Subjects: | L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L16 - Industrial Organization and Macroeconomics: Industrial Structure and Structural Change ; Industrial Price Indices D - Microeconomics > D6 - Welfare Economics > D62 - Externalities O - Economic Development, Innovation, Technological Change, and Growth > O3 - Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights > O32 - Management of Technological Innovation and R&D D - Microeconomics > D4 - Market Structure, Pricing, and Design > D49 - Other |
Item ID: | 9284 |
Depositing User: | Abhay Gupta |
Date Deposited: | 24 Jun 2008 01:41 |
Last Modified: | 30 Sep 2019 04:53 |
References: | William James Adams and Janet L. Yellen. Commodity bundling and the burden of monopoly. The Quarterly Journal of Economics, 90(3):475{498, August 1976. G.C. Archibald, B.C. Eaton, and Richard Lipsey. Address models of value theory. Technical report, 1982. Yannis Bakos and Erik Brynjolfsson. Bundling information goods: Pricing, prots, and eciency. Management Science, 45(12):1613{1630, December 1999. Steven Berry, James Levinsohn, and Ariel Pakes. Automobile prices in market equilibrium. Econometrica, 63(4):841{890, July 1995. W Erwin Diewert. Hedonic regressions: A consumer theory approach. University of British Columbia, Discussion Paper No.: 01-12, April 2001. Robert C. Feenstra. Exact hedonic price indexes. The Review of Eco- nomics and Statistics, 77(4):634{653, November 1995. Dennis Fixler and Kimberly D Zieschang. Incorporating ancillary measures of process and quality change into a superlative productivity index. Journal of Productivity Analysis, pages 245{267, 1992. Peter Hill. Tangibles, intangibles and services:a new taxonomy for the classication of output. The Canadian Journal of Economics, 32(2):426{ 446, April 1999. Wagner Kamakura and R. Venkatesh. Optimal bundling and pricing under a monopoly: Contrasting complements and substitutes from independently valued products. Journal of Business, 76(2), 2003. Jerey M Perlo and Steven C Salop. Equilibrium with product dierentiation. Review of Economic Studies, 52(1):107{20, January 1985. Sherwin Rosen. Hedonic prices and implicit markets: Product dierentiation in pure competition. Journal of Political Economy, 82(1):34{55, Jan.-Feb. 1974. Richard Schmalensee. Gaussian demand and commodity bundling. The Journal of Business, 57(1):211{230, January 1984. Jack E. Triplett. High-tech industry productivity and hedonic price indices. Industry Productivity: International Comparison and Measure- ment Issues, pages 119{142, May 1996. |
URI: | https://mpra.ub.uni-muenchen.de/id/eprint/9284 |