Quality-Adjusted Prices of Japanese Mobile Phone Handsets and Carriers' Strategies

Naoki Watanabe; Ryo Nakajima; Takanori Ida

doi:10.1007/s11151-010-9253-9

Quality-Adjusted Prices of Japanese Mobile Phone Handsets and Carriers' Strategies

Naoki Watanabe, Ryo Nakajima, Takanori Ida

Research output: Contribution to journal › Article › peer-review

4 Citations (Scopus)

Abstract

In order to discuss oligopolists' strategic determination of quality-adjusted prices (QAPs), we conducted a hedonic regression analysis using adjacent periods and estimated the QAPs of mobile phone handsets sold in Japan between 2002 and mid-2007 for each carrier. We observed (1) a decreasing trend in QAP for each carrier, (2) a more rapid decrease in the QAPs of the two smaller carriers' handsets relative to that of the largest carrier, and (3) a turnover cycle of the QAPs between the two smaller carriers. If both small carriers decrease their QAPs at roughly the same time, neither will significantly increase their subscriber share, which can generate a turnover cycle of QAPs.

Original language	English
Pages (from-to)	391-412
Number of pages	22
Journal	Review of Industrial Organization
Volume	36
Issue number	4
DOIs	https://doi.org/10.1007/s11151-010-9253-9
Publication status	Published - 2010

Keywords

Hedonic regression
Quality-adjusted price
Strategies

ASJC Scopus subject areas

Economics and Econometrics
Strategy and Management
Organizational Behavior and Human Resource Management
Management of Technology and Innovation

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title = "Quality-Adjusted Prices of Japanese Mobile Phone Handsets and Carriers' Strategies",

abstract = "In order to discuss oligopolists' strategic determination of quality-adjusted prices (QAPs), we conducted a hedonic regression analysis using adjacent periods and estimated the QAPs of mobile phone handsets sold in Japan between 2002 and mid-2007 for each carrier. We observed (1) a decreasing trend in QAP for each carrier, (2) a more rapid decrease in the QAPs of the two smaller carriers' handsets relative to that of the largest carrier, and (3) a turnover cycle of the QAPs between the two smaller carriers. If both small carriers decrease their QAPs at roughly the same time, neither will significantly increase their subscriber share, which can generate a turnover cycle of QAPs.",

keywords = "Hedonic regression, Quality-adjusted price, Strategies",

author = "Naoki Watanabe and Ryo Nakajima and Takanori Ida",

note = "Funding Information: Acknowledgments The authors wish to thank Nobuyuki Harada, Yosuke Okada, Masakatsu Okubo, Isao Shoji, Ryuichi Tamura, seminar participants at the 14th DC (Japan), Kyoto University, and JEA spring meeting 2009, and two anonymous referees and the editor of this journal for helpful comments and suggestions. This research was supported by the Grant-in-Aid 2007 of the Telecommunication Advancement Foundation, the Grant-in-Aid 2007 of the Japan Economic Research Foundation, and the MEXT Grant-in-Aid 18730517 (Watanabe) and 18530203 (Ida).",

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AB - In order to discuss oligopolists' strategic determination of quality-adjusted prices (QAPs), we conducted a hedonic regression analysis using adjacent periods and estimated the QAPs of mobile phone handsets sold in Japan between 2002 and mid-2007 for each carrier. We observed (1) a decreasing trend in QAP for each carrier, (2) a more rapid decrease in the QAPs of the two smaller carriers' handsets relative to that of the largest carrier, and (3) a turnover cycle of the QAPs between the two smaller carriers. If both small carriers decrease their QAPs at roughly the same time, neither will significantly increase their subscriber share, which can generate a turnover cycle of QAPs.

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