Competition in Turkish mobile telecommunications markets: Price elasticities and network substitution |
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Authors: | Mehmet Karacuka Justus Haucap Ulrich Heimeshoff |
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Institution: | a Ege University, Department of Economics, 35100 Bornova, Izmir, Turkey b Heinrich-Heine-University of Düsseldorf, Düsseldorf Institute for Competition Economics (DICE), Universitätsstr. 1, 40225 Düsseldorf, Germany |
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Abstract: | This paper estimates demand elasticities for Turkish mobile telecommunications markets. In contrast to most other studies, firm-level data is used to estimate dynamic panel data models including instrumental variable techniques. Both short- and long-run elasticities are calculated, yielding a long-run price elasticity of −0.72 for the post-paid market and of −0.33 for the pre-paid market. The short-run price elasticity is estimated to be −0.36 for the post-paid market and −0.20 for the pre-paid market. In addition, there is evidence of fixed-to-mobile traffic substitution for consumers who use pre-paid cards. |
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Keywords: | Mobile telecommunications Price elasticity Fixed-mobile substitution Dynamic panel data analysis |
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