Demand for mobile internet: Evidence from a real-world pricing experiment

Arbeitspapier

Mobile phones are increasingly used as a gateway to the Internet. The take-up of mobile phone-enabled Internet services was, however, initially slower than expected, at least in Europe. We estimate non-parametrically the price elasticities of demand for first-generation wireless services using (i) consumerlevel panel data from a real world pricing experiment and (ii) the restrictions of a structural model. We decompose the number of wireless connections into the number of needs and the conditional probability of establishing a connection, given a need. According to our estimates needs were plenty, but the conditional usage probability small. Demand for first-generation wireless services was highly elastic and the welfare gains to an (early) adopter moderate. Pricing and taxation of wireless services had a large suppressing effect on demand

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: ETLA Discussion Papers ; No. 964

Classification and Topics

• Classification: Wirtschaft ; Production, Pricing, and Market Structure; Size Distribution of Firms ; Consumer Economics: Empirical Analysis
• Subject: Wireless internet ; demand ; new products ; welfare ; Mobilkommunikation ; Internet ; Preiselastizität ; Nachfrage ; Medienverhalten ; Test ; Finnland

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Gao, Maija ; Hyytinen, Ari ; Toivanen, Otto
• Event: Veröffentlichung
• (who): The Research Institute of the Finnish Economy (ETLA)
• (where): Helsinki
• (when): 2004

Further information

• Handle: http://hdl.handle.net/10419/63813
• Last update: 10.03.2025, 11:41 AM CET