Changes in consumers' behavior when a vertically integrated service is separated —The case of Japanese mobile phone services—

In this paper, I empirically examine the consumer behavior change in the case that the current vertically integrated Japanese mobile phone market was separated by employing the stated preference survey. As a hypothetical vertically separated situation, I assumed the introduction of contents compatibility and handsets compatibility among different mobile phone carriers. My analysis also assumed the introduction of mail address portability. My estimation results yield the following implications: (1) handset compatibility, contents compatibility, and mail address portability reduces consumer's switching costs, and (2) current contents incompatibility is offsetting the network quality difference among carriers.Telecom market, Mobile Phone, Switching costs, Vertically Integrated market, Compatibility, Conjoint analysis, Discrete choice model, Mixed logit model

Measuring Network Effects in Mobile Telecommunications Markets with Stated‐Preference Valuation Methods

This paper demonstrates how stated-preference methods can be applied to modeling consumers' preferences in the field of mobile telecommunications, and to measuring and the valuation of network effects. We illustrate this with a case study of mobile phone operators in Poland. We utilize the Choice Experiment method and present the respondents with hypothetical choices of mobile phone operators, while explicitly controlling for network effects in the form of other users in the same network. Based on the hypothetical choices consumers make we construct a conditional random parameters multinomial logit model to analyze their preferences. This approach allows us to calculate welfare effects associated with alternatives, as well as marginal rates of substitution (and hence implicit prices) of the attributes used to describe the choices, such as operator brand and distribution of family and friends between available mobile networks. The latter constitutes a network effect as consumer's utility is influenced by the number (or ratio) of members of his or her family, friends and other users subscribed to the same operator. Our results confirm the existence of a strong network effect, which is related to the size of the social network group a particular subscriber belongs to, rather than the absolute size of the mobile operator's customer base. We observe that there are two sources of this 'gross' network effect - pecuniary (arising from possible price discounts for on-net calls) and non-pecuniary, and demonstrate a way to disaggregate them. In addition, we find that brand perception and brand loyalty are important determinants of operator choice. Finally, through the application of a non-market valuation method we are able to calculate monetary values of the network effect and brand loyalty, and both turn out to be relatively high. The results might be of a particular interest to mobile phone operators and regulatory authorities - we find that the capacity for vigorous price competition between mobile operators is limited due to significant non-price barriers which mitigate subscribers' mobility in the market. We demonstrate a way to measure these effects in monetary terms based on modeling of consumer preferences. --Network effects,mobile telecommunications,brand valuation,stated preference methods,non-market valuation methods,choice experiment,multinomial conditional logit model,preference heterogeneity,random parameters model

Travel Demand Growth: Research on Longer-Term Issues. The Potential Contribution of Trip Planning Systems

INTRODUCTION 1.1 The growth in demand for travel Over the 20 years hm 1965, National Travel Survey (NTS) data shows a 61% growth in total person - km of travel. More detailed analysis suggests that this is made up roughly as follows:- due to increased population 4% due to more journeys 22% due to longer journeys 35% This implies that around 60% of the growth in travel has been due to people travelling further, rather than making more journeys. It is interesting to note, too, that the same phenomenon occurs even in the most congested areas. Between 1975 and 1985, NTS shows an 11% growth in person -km by London residents, at a time when population fell by 5%. In this case, the growth is made up roughly as follows:- due to lost population -5% due to more journeys 4% due to longer journeys 12% It is of course difficult to estimate the extent to which future growth in travel will be generated by longer journeys. The NRTF, which predicts a growth in car-km of between 120% and 180% between 1985 and 2025, is not based on a procedure which enables the effects of journey making and journey length to be separated. However, it is worth noting that if the same pattern were to exist at a national level in future, the predicted growth in car travel due to longer journeys could be equivalent to between 75% and 100% of today's car travel. It seems appropriate to ask whether it is a wise use of scarce resources to provide the infrastructure and energy needed to enable people to carry out their activities further from home. (Continues...

Triple play as a separate market? Empirical findings and consequences to broadband market definition

Double and triple play bundled offers are common phenomena in many national communication markets. However the overall market context, technological background of provision, the level of facility based platform competition and strategic role of the bundled offers seems to be different in national markets. There is clear challenge to the current European regulatory approach to broadband markets, which is treated as a separate market on its own. If there was a separate market for the bundled product, the whole market analysis and remedy system had to be adapted to this market reality. Testing the (triple play) bundle the market hypothesis is the logical and necessary first step to address this issue. We designed and conducted an empirical study supported by the Hungarian Competition Authority in order to address these questions. A special, situation adaptive questionnaire design was applied in order to get the possibly best informed and adequate stated preference reactions to a 10% price change. We used the cri ical loss test for market definition, testing whether there is a separate market for triple play bundles. Results indicates that the market definition question whether bundle has to or could be considered as a separate relevant market can be answered using well designed survey techniques. Many clues support the hypothesis that the triple play bundle in 2010 indeed was a separate relevant market. --triple play,double play,multi-play,bundle,market definition,SSNIP test,consumer survey,stated preference approach,critical loss

Choice Experiments in Enviromental Impact Assessment: The Toro 3 Hydroelectric Project and the Recreo Verde Tourist Center in Costa Rica

Choice experiments, a stated preference valuation method, are proposed as a tool to assign monetary values to environmental externalities during the ex-ante stages of environmental impact assessment. This case study looks at the impacts of the Costa Rican Institute of Electricity’s Toro 3 hydroelectric project and its affects on the Recreo Verde tourism center in San Carlos, Costa Rica. Compared to other valuation methods (e.g., travel cost and contingent valuation), choice experiments can create hypothetical but realistic scenarios for consumers and generate restoration alternatives for the affected good. Although they have limitations that must be taken into account in environmental impact assessments, incorporating economic parameters—especially resource constraints and tradeoffs—can substantially enrich the assessment process.stated-preference, economic valuation, choice experiments, hydropower, tourism, Costa Rica

Quality and Public Transport Service Contracts

Public authorities and transport operators are both involved in the provision of public transport services. There is a contrast between the social goals of the former and the private ones of the latter. Regulation plays an important role especially failing competition. Service contracts are the natural method to set bilateral After a brief description of the most important regulatory procedures, we focus our attention on the quality framework in service contracts. In recent years the inclusion of quality requirements in contracts is becoming common practice, especially when adopting price cap regulation. This paper suggests a criterion for service quality definition, measurement and integration in contracts for the production of socially valuable transport services. Using stated preferences methods and choice-based conjoint analysis to analyse customer preferences we estimate the passengers’ evaluation of different service features and calculate a service quality index. A case study demonstrates the procedure to follow for measuring service quality in local public transport.service quality, stated preferences, service contract.

Capturing the Visitor Profile for a Personalized Mobile Museum Experience: an Indirect Approach

An increasing number of museums and cultural institutions around the world use personalized, mostly mobile, museum guides to enhance visitor experiences. However since a typical museum visit may last a few minutes and visitors might only visit once, the personalization processes need to be quick and efficient, ensuring the engagement of the visitor. In this paper we investigate the use of indirect profiling methods through a visitor quiz, in order to provide the visitor with specific museum content. Building on our experience of a first study aimed at the design, implementation and user testing of a short quiz version at the Acropolis Museum, a second parallel study was devised. This paper introduces this research, which collected and analyzed data from two environments: the Acropolis Museum and social media (i.e. Facebook). Key profiling issues are identified, results are presented, and guidelines towards a generalized approach for the profiling needs of cultural institutions are discussed