Exclusivity, Bundling and Switching in Communications Markets

Burnett, Tim (2013) Exclusivity, Bundling and Switching in Communications Markets. Doctoral thesis, University of East Anglia.

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Abstract

Abstract
This thesis empirically analyses two case studies of markets associated with high-tech
goods or services. In both cases the analysis includes an extensive literature review and
in-depth study of market characteristics. These serve to inform the investigations and
also provide technical background.
The �rst part of the thesis examines the international distribution of the Apple
iPhone and the incentives of the manufacturerto distribute the product exclusively to
mobile network operators. The study uses a novel application of a double-hurdle model
to analyse a cross-sectional dataset of 187 countries featuring industry-speci�c and
demographic variables drawn from both o�-the-shelf sources and from an analysis of
several hundred individual sources of evidence. The results show that the mechanisms
determining the duration of exclusivity agreements di�er from those factors determining
their initial imposition. In addition, it is shown that the level of competitiveness
and concentration in the downstream market are signi�cant determinants of both the
decision to sell in a country and the duration of any exclusivity agreements. The presence
of competing technological standards is also shown to result in longer periods of
exclusivity indicating slower di�usion of the product in these countries.
The second part of the thesis empirically examines the incentives of individuals to
switch provider of their household communication services in the presence of bundling
of services. The study uses a random e�ects probit method to analyse survey data of
2,871 households' communication subscriptions. The results indicate that when service
subscriptions are bundled there is a signi�cant reduction in the likelihood of an individual
switching their provider. Furthermore, this e�ect is intensi�ed when the bundle
includes services in which the provider specialises.
The results of both studies are consistent with economic predictions of, respectively,
the use of key di�erentiators by �rms to gain competitive advantages, and the use of
bundling to create switching costs for consumers. Both studies represent signi�cant
contributions to the study of vertical restraints, and consumer switching behaviour.

Item Type: Thesis (Doctoral)
Faculty \ School: Faculty of Social Sciences > School of Economics
Depositing User: Mia Reeves
Date Deposited: 06 Mar 2014 12:42
Last Modified: 06 Mar 2014 12:42
URI: https://ueaeprints.uea.ac.uk/id/eprint/47969
DOI:

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