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Competition in Network Industries: Evidence from the Rwandan Mobile Phone Network

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  • Daniel Bjorkegren
Abstract
This paper analyzes the potential for competition policy to affect welfare and investment in a network industry. When a network is split between competitors, each internalizes less network effects, but may still invest to steal customers. I structurally estimate the utility of adopting a mobile phone from subsequent usage, using transac-tion data from nearly the entire Rwandan network. I simulate the equilibrium choices of consumers and network operators. Adding a competitor earlier could have reduced prices and increased incentives to invest in rural towers, increasing welfare by the equivalent of 1% of GDP.

Suggested Citation

  • Daniel Bjorkegren, 2020. "Competition in Network Industries: Evidence from the Rwandan Mobile Phone Network," Working Papers 2020-04, Brown University, Department of Economics.
    • Handle: RePEc:bro:econwp:2020-04
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    Cited by:

    1. Bianchi, Milo & Bouvard, Matthieu & Gomes, Renato & Rhodes, Andrew & Shreeti, Vatsala, 2023. "Mobile payments and interoperability: Insights from the academic literature," Information Economics and Policy, Elsevier, vol. 65(C).
    2. Jack, B. Kelsey & McDermott, Kathryn & Sautmann, Anja, 2022. "Multiple price lists for willingness to pay elicitation," Journal of Development Economics, Elsevier, vol. 159(C).
    3. Marc Bourreau & Yutec Sun, 2022. "Competition and Quality: Evidence from the Entry of Mobile Network Service," Working Papers 22-04, NET Institute.
    4. Daniel Bjorkegren & Burak Ceyhun Karaca, 2020. "The Effect of Network Adoption Subsidies: Evidence from Digital Traces in Rwanda," Papers 2002.05791, arXiv.org.

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