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Joao Granja: Regulation and Service Provision in Dynamic Oligopoly: Evidence from Mobile Telecommunications
I study coverage requirements, a common regulation in the mobile telecommunications industry that intends to accelerate the roll-out of new mobile telecommunications technologies to disadvantaged areas. I argue that the regulation may engender entry deterrence effects that limit its efficacy and lead to technology introduction patterns that are not cost-efficient. To quantify the impact of coverage requirements on market structure and the speed and cost of technology roll-out I develop and estimate a dynamic game of entry and technology upgrade under regulation. I estimate the model using panel data on mobile technology availability at the municipality level in Brazil. In counterfactual simulations, I find that coverage requirements accelerate the introduction of 3G technology by just over 1 year, on average, and reduce firms’ profits by 24% relative to a scenario with no regulation. I find the entry deterrence effects to be small. Moreover, an alternative subsidization policy leads to a similar acceleration in the roll-out of 3G and substantially higher aggregate profits, likely increasing aggregate welfare relative to coverage requirements.
Date:
30 November 2021, 16:00
Venue:
Manor Road Building, Manor Road OX1 3UQ
Venue Details:
Seminar Room A or Online https://zoom.us/j/96750891094?pwd=QlhJQ1R5bHYxc2ZaUHI4WCsrQWpuUT09
Speaker:
Joao Granja (University College London)
Organising department:
Department of Economics
Part of:
Applied Microeconomics Seminar
Booking required?:
Not required
Audience:
Members of the University only
Editor:
Emma Heritage
