Demand Curves and Operator Strategies in the Finnish Mobile Broadband Market

2014 ◽  
Vol 10 (1) ◽  
pp. 30-46 ◽  
Author(s):  
Michail Katsigiannis ◽  
Constantinos Valagiannopoulos
Keyword(s):  
Marginal Cost ◽  
Demand Curve ◽  
Perfect Competition ◽  
Data Traffic ◽  
Mobile Broadband ◽  
Flat Rate ◽  
Radio Access ◽  
Broadband Market ◽  
Impact Of Technology ◽  
The Impact

Finland, among the first to adopt mobile broadband services, faces rapid growth of mobile data traffic. Therefore, Finnish mobile operators continually invest in their radio access networks to handle this growth, which represents an attractive revenue source. This study presents a demand curve estimate for mobile broadband data traffic, which takes into account the impact of technology evolution on network coverage and capacity. Based on the demand curve and the market equilibrium, this study proposes two strategies for mobile operators: i) reducing the marginal cost of traffic, and ii) changing the pricing structure. Assuming that mobile operators are price-takers (perfect competition), the findings of this study indicate that a continuing reduction of marginal cost is imposed by market forces. However, this policy of cost reduction will inevitably reach its limits. Thus, this study proposes a change in pricing structure from flat-rate tariff to usage-based charging.

scholarly journals Digitization and profitability

2019 ◽  
Author(s):  
Yasushi Masuda ◽  
Seungjin Whang
Keyword(s):  
Marginal Cost ◽  
Production Cost ◽  
Demand Curve ◽  
Marginal Revenue ◽  
Digital Goods ◽  
Deterministic Demand ◽  
Reservation Prices ◽  
Downward Spiral ◽  
The Impact ◽  
Variable Production

AbstractConsider a monopolistic vendor who faces a known demand curve. By setting a price that equates marginal revenue with marginal cost, the vendor will maximize his profit. This logic holds true of both physical and digital goods. But since digitization will lower the variable production cost, it will strictly increase the profit to the vendor. Then, can we conclude that digitization always improves the vendor’s profitability? Not necessarily. Now consider what will happen on the next day of the sales. Facing deterministic demand, the physical goods vendor must have prepared the exact quantity of the product to sell, and thus all products are sold out. By contrast, the digital goods vendor will have no stock out, thanks to the nature of the digital good. Therefore, the rational vendor will try to sell more and achieve a higher profit after the sales date. To this end, the vendor will now lower the price to attract additional customers with lower reservation prices. The process will indefinitely continue. Knowing this would happen, customers will wait for the price reduction. Even the customers who would have purchased on the first day would defer the purchase until price gets lower. The digital goods vendor will anticipate this and accordingly lower the price on the first day and later, thereby compromising his profitability. Note that this downward spiral takes place as a result of digitization. Thus, digitization may not necessarily improve the profitability to the vendor. We develop an economic model to formally analyze the impact of digitization on the profitability to the vendor.

scholarly journals THE IMPACT OF TECHNOLOGY ON REGIONAL PRICE DISPERSION IN THE US

2021 ◽  
Vol 0 (0) ◽  
pp. 1-20
Author(s):  
Ismail H. Genc
Keyword(s):  
Standard Deviation ◽  
Price Dispersion ◽  
Perfect Competition ◽  
Policy Makers ◽  
Technological Advances ◽  
Fast Pace ◽  
The Usa ◽  
Impact Of Technology ◽  
Available Information ◽  
The Impact

We analyze the behavior of inflation in the era of fast pace information thanks to technological advances, especially internet. Owing to readily available information, prices/inflation should quickly converge under perfect competition. To this end, we explore the possibility of price convergence in regional inflation in the USA including the permanency of such a phenomenon if observed, a concern for monetary policy makers. Empirically, we analyze standard deviation of regional inflation with special attention to technology. We show that standard deviation of inflation is not constant over time, but not necessarily ever-declining. Technology seems to help reduce price dispersion across regions.

The Good, the Bad and the Ugly
. A Broad look at the Adaptation of Technology in Education

2020 ◽  
Vol 2 (1) ◽  
pp. 31-44
Author(s):  
Vladislav Ilin
Keyword(s):  
Technology In Education ◽  
Advantages And Disadvantages ◽  
Standardized Method ◽  
Impact Of Technology ◽  
The Impact ◽  
The Way

Technology in education is a global phenomenon affecting learners of all ages. The breadth and variety of available tools make it difficult to implement a standardized method for assessing the impact of technology on learning. The lack of a consensus on good and bad practices results in inconsistent application and mixed learning results.   This article takes a look at the adaptation of technology to education and examines the various tools used to enhance learning. We discuss the advantages and disadvantages of using technology, as well as review methodologies for evaluating the impact.   The essay concludes by identifying several problems with the way technology is evaluated and offers suggestions for further research to address those problems.

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