Price competition and the Bertrand model: the paradox of the German mobile discount market

Daniel Kaimann*, Britta Hoyer

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

Abstract

We investigate the degree of price competition among telecommunication firms. Underlying a Bertrand model of price competition, we empirically model pricing behaviour in an oligopoly. We analyse panel data of individual pricing information of mobile phone contracts offered between 2011 and 2017. We provide empirical evidence that price differences as well as reputational effects serve as a signal to buyers and significantly affect market demand. Additionally, we find that brands lead to an increase in demand and thus are able to generate spillover effects even after price increase.

Original languageEnglish
Pages (from-to)54-57
Number of pages4
JournalApplied Economics Letters
Volume26
Issue number1
DOIs
Publication statusPublished - 2 Jan 2019

Fingerprint

Dive into the research topics of 'Price competition and the Bertrand model: the paradox of the German mobile discount market'. Together they form a unique fingerprint.

Cite this