1 research outputs found
Merger Simulation in Mobile Telephony in Portugal
This article assesses the unilateral e ects on prices of a merger in the
Portuguese mobile telephony market. We use aggregate quarterly data from
1999 to 2005 and a nested logit model to estimate the price elasticities
of demand and the marginal costs of subscription of mobile telephony.
Given these estimates, we simulate the e ects of the merger. We nd that
the available mobile telephony subscription products are close
substitutes. The merger may cause substantial price increases, even in
the presence of large cost e ciencies. On average, prices increase by 7%
without cost e ciencies, and by about 6% with a 10% marginal cost reduction