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We analyze consumer switching between mobile tariff plans using consumer-level panel data. Consumers receive reminders from a specialist price-comparison website about the precise amount they could save by switching to alternative plans. We find that the effect on switching of being informed about potential savings is positive and significant. Controlling for savings, we also find that the effect of incurring overage payments is also significant and six times larger in magnitude. Paying an amount that exceeds the recurrent monthly fee weighs more on the switching decision than being informed that one can save that same amount by switching to a less inclusive plan, implying that avoidance of losses motivates switching more than the realization of equal-sized gains. We interpret this as evidence of loss aversion. We are also able to weigh how considerations of risk versus loss aversion affect mobile tariff plan choices: we find that a uniform attitude towards risk in both losses and gains has no significant influence on predicting consumers’ switching, whereas perceiving potential savings as avoidance of losses, rather than as gains, has a strong and positive effect.

This paper first summarises the main results of the recent literature on competition in telecommunication networks, based on the models of Armstrong (1998) and Laffont et al. (1998). We then extend the basic framework by introducing an investment stage, prior to price competition, in order to analyse the incentives that operators have to invest in facilities with different levels of quality. We show that the incentives to invest are influenced by the way termination charges are set. In particular, when the quality of a network has an impact on all calls initiated by own customers (destined both on-net and off-net), we obtain a result of "tacit collusion" even in a symmetric model with two-part pricing. Firms tend to underinvest in quality, and this would be exacerbated if they can negotiate reciprocal termination charges above cost.

We review recent proposals put forward by the Italian Regulator of Telecommunications (AGCOM) with the aim of reducing intrusive ex ante regulation in the industry. In particular, we discuss a) the abolition or relaxation of retail price control for the operator with significant market power, b) the merits of a system of network cap on wholesale prices and c) a margin squeeze test to detect possible anti-competitive behaviour. Notwithstanding the interesting properties of the proposed changes, we conclude that they are still premature given the current state of competition in Italy.

Economic theory, as well as various countries' experiences, show that auctioning the spectrum works better than other allocation methods, such as beauty contests. As well as raising revenues, a well-designed auction assigns licences to the operators best able to use them. Auctions can also be designed to advance public-policy goals. In this paper, we discuss some common misunderstandings about auctions. We also consider the need for asymmetric regulations for the next generation of mobile services in terms of bandwidth, roaming and coverage constraints.

We consider a media market where consumers mix content offered by different firms and firms charge two-part tariffs. As compared to pure linear pricing (pay-per-view), firms make higher profits, while consumers are worse off and the allocation is not first-best. We also consider flat subscription fees and show that they make mixing unattractive. Both two-part tariffs and pay-per-view Pareto-dominate flat fees.

Most of the contest literature deals with first prizes; this Paper deals with the optimality of second prizes. We show that in a three-person contest where one contestant is very strong a second prize can be optimal from the point of view of eliciting maximum effort from every contestant. Moreover, we consider the desirability of second prizes from the point of view of competitive balance, which matters for contests such as sports competitions.

Universal service objectives are pervasive in telecommunications, and have gained new relevance after liberalization and the introduction of competition in many markets. Despite their policy relevance, little work has been done allowing for a thorough discussion of instruments designed to achieve universal service objectives under competition. We intend to fill this gap, and consider various policy instruments, such as constraints on pricing and coverage. It is shown that these are not competitively neutral and may have far-reaching strategic effects. Equilibrium coverage of both incumbent and entrant may be lower than without regulation, and firms may even (noncooperatively) leave each others' markets to lessen competitive pressure in their remaining markets. These effects depend on which measures are imposed at the same time, thus no single measure can be evaluated in isolation. We also point out that different groups of consumers are affected in different ways, making welfare comparisons difficult.

An important component of policies to promote effective competition among all segments of network industries (such as electricity, telecommunications, or railways) is a regulatory environment guaranteeing that competitors have access to the services of potential"bottleneck"facilities too costly to duplicate. Rules covering fair access to these facilities - including fair access prices - generally improve economic efficiency by easing competition in markets both upstream and downstream from the bottleneck. Appropriate access pricing rules are especially needed when a dominant firm controls the supply of one or more inputs -- for example, gas transportation, electricity transmission, local telecommunication access, or railway track -- vital for its competitors. Access pricing is part of the antitrust concern central to the so-called essential facilities doctrine covered by U.S. legislation. It is also related broadly to such competition policy issues as quantity discounts, cross-subsidies, tie-ins, refusals to deal or unbundle, exclusive dealing, and predatory pricing. Access pricing is one of the most important and controversial questions in regulating infrastructure services. This complexity stems partly from the practical fact that access rules can be discussed only with reference to the rest of the regulatory environment, since regulators have many goals and constraints. In their survey of access pricing, the authors try to make it clear that access rules should not be assigned too many expectations. There are a few things access prices already do, however, and should continue doing until an all-encompassing solution comes along. Their survey covers access rules for both vertically unbundled and vertically integrated industries. It addresses the question: what happens if access is left unregulated? And it discusses the main challenges to implementation: calculating and allocating costs, finding a usage-based solution to the access pricing problem (the global price cap), and monitoring anticompetitive behavior (partial caps or adjusted global caps).

This thesis uses empirical techniques of dynamic modelling to examine three major means for brands to achieve sustainable growth, including new product introduction (NPI), digital advertising, and value co-creation with consumers through digital crowdfunding. Essay 1 (Chapter 2) explores the impact of NPI on the performance volatility of the innovating and the competing brands in the CPG industry. Using a GARCH-in-VAR modelling approach, we find that NPI causes a long-term rise in sales volatility of all brands. Such volatility increase is especially significant for new brand entries, premium-priced and more innovative brands, and retailers with a larger assortment and those where private labels dominate. More importantly, NPI's impact through sales volatility on the sales level of brands is consistently positive. Findings from Essay 1 challenge marketers' conventional wisdom to curb volatility and instead highlight brands' potential to benefit from the market turbulence following an NPI. Essay 2 (Chapter 3) investigates the effect of processing disfluency on consumers' decisions to click on digital display advertisements. With consumers flooded by digital ads, it is imperative for marketers to strike a balance between capturing consumer attention and keeping them unannoyed. A series of lab experiments combined with field data modelling using the Dynamic Factor Model indicate that processing disfluency can elicit consumer interest and desire to explore, leading to a higher willingness to click. Such disfluency does not cause consumer ad annoyance and can be induced by negative ad emotional appeals such as fear and sorrow. Essay 3 (Chapter 4) studies investment dynamics between digital crowdfunding investors, who are also the future consumers of the fundraising venture. Recognizing the co-existence between more and less informed investors, our results show that large investments by informed investors are effective signals that positively influence subsequent investors' behaviours. Such an effect is strengthened by a higher level of social similarity between investors and the size of the deal. Our findings shed light on the asymmetric information flows from more to less informed investors, and the complementarity between different types of investors. Open Access

This dissertation is comprised of three chapters studying customers’ online search and purchase behaviours using clickstream data collected from the context of air travel. The first chapter explores how choice overload effect influences customers’ purchase decisions under different time pressure conditions. Two studies yield two findings. The first finding is that larger choice sets result in purchase deferral, which is consistent with choice overload effects. Time pressure significantly moderates this effect, because more deferrals occur when the purchase deadline is further away. The second finding is that it is not the real, physical time passing per se that creates a sense of time pressure; instead, time pressure appears to be defined by customers’ perception of time limit, which moderates the choice overload effect by shifting customers’ regulatory focus. The second chapter develops the modelling approaches of using path data to predict purchases. We develop the concepts of two types of sequence of browsing behaviours: the sequence of search strategies and the sequence of viewing behaviours. We find that viewing behaviour is a better indicator of purchase tendencies. We develop the modelling approaches of predicting the next viewing behaviour and using this predicted viewing behaviour to predict the purchase probability. Our approach improves current methods of predicting purchases by overcoming two disadvantages: inflexibility in adaption to different websites and missing detailed information of customers’ behaviours. We provide managerial insights on customising information shown to customers according to predicted viewing behaviours in order to improve purchase conversion rates. The third chapter reveals the relationship between customers’ online search strategies and decision strategies. Our first finding is that the search strategy of filtering can be viewed as a decision strategy characterised by Elimination by aspects (EBA) strategy, while flexible searches can be viewed as a decision strategy featured by Satisficing strategy. Our second finding is that the goal-related variable has the predominate effect on choice of decision strategies in the studied context. Customers choose the decision strategy that can enable them to fulfil the goal of finding a good price, instead of the strategy that simplify the choice task. Open Access

Digital technologies have been transforming the economy and are challenging many traditional frameworks. In this thesis, we contribute to the research stream that revisits conventional models in the light of the digital economy. Our focus is on the releases of new products, a widespread business practice disrupted by digitally-driven consumer preferences and by an enhanced toolbox for firms. First, we model analytically the releases of different versions of a durable product in a monopoly. A firm selects the price, time to release a new version, and whether to continue selling the old product at a discount or not. Consumers, on the other hand, have distinct foresight and perception of product obsolescence. We show that the firm's release strategy crucially depends on obsolescence perception of consumers and that the firm can influence obsolescence by a prudent timing of the new version. Secondly, we provide an analytical framework for the release of a new product category when two asymmetric firms engage in price and quality competition. One of the firms, the ecosystem firm, can leverage its previous market coverage. The other firm, the category firm, is new to the market. The ecosystem firm can add on to the stand-alone quality of the new product by linking the two classes of products via a software while the category firm relies only on the intrinsic connection between the products. We characterize the conditions when the ecosystem leverage keeps the competitor at bay and deters innovation. Finally, we discuss release strategies of online content providers, such as streaming services and e-learning platforms. We provide an optimization model that covers three aspects of the release strategy: release of an individual series, order of multiple series within each subscription period, and personalization of the content. Further, we test our model using data from online education. Open Access