Switching Costs, Network Effects, and Competition in the European Mobile Telecommunications Industry.

Author List: Fuentelsaz, Lucio; Maicas, Juan Pablo; Polo, Yolanda;
Information Systems Research, 2012, Volume 23, Issue 1, Page 93-108.
This paper empirically analyzes the joint effect of switching costs and network effects in determining the level of competition in the European mobile communications industry. Theoretical reasoning argues that switching costs and network effects may confer some market power that firms can strategically exploit to reduce competition and thus increase profits. Theoretical predictions are completely confirmed by the empirical evidence and important asymmetries between the market structures in the different European countries can be observed. These asymmetries are clearly related to the levels of switching costs and network effects—the greater their importance, the lower the rivalry in the market. This suggests that the recent efforts of policymakers to reduce the negative consequences of switching costs and network effects have not been successful enough and these efforts must be strengthened, at least in several countries.
Keywords: competition; mobile telecommunications industry; network effects; switching costs
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#285 0.219 effects effect research data studies empirical information literature different interaction analysis implications findings results important set large provide using paper
#151 0.181 costs cost switching reduce transaction increase benefits time economic production transactions savings reduction impact services reduced affect expected optimal associated
#171 0.153 markets industry market ess middle integrated logistics increased demand components economics suggested emerging preference goods interesting form recent vertically chinese
#242 0.151 market competition competitive network markets firms products competing competitor differentiation advantage competitors presence dominant structure share using incumbent make important
#160 0.073 mobile telecommunications devices wireless application computing physical voice phones purchases ubiquitous applications conceptualization secure pervasive differential usability increasing local location
#227 0.067 commitment need practitioners studies potential role consider difficult models result importance influence researchers established conduct investigated establishing appear clearly determining