Autori
Jeanjean, Francois
Houngbonob, Georges

Titolo
Investment and market power in mobile mergers
Periodico
Economia e politica industriale
Anno: 2019 - Volume: 46 - Fascicolo: 1 - Pagina iniziale: 65 - Pagina finale: 81

The welfare effects of mergers in the mobile industry is the topic of an ongoing debate, however, there is still a lack of empirical evidence about the effect on consumer surplus. In this paper, we provide a simple structural model that accounts for investment in order to investigate the effect of mergers on consumer surplus in the mobile industry. Using a Cournot model with investment in cost-reducing technologies, and data on mobile Internet traffic from 18 European markets, we find that consumer surplus is maximized in markets with 3 symmetric operators. This finding accords well with a rising price per user and investment as a result of a merger. It suggests that, in mobile mergers, except 3-2 merger, dynamic efficiencies from investment outweigh static efficiencies from market power.



SICI: 0391-2078(2019)46:1<65:IAMPIM>2.0.ZU;2-

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