Product Market Competition and Lobbying Coordination in the U.S. Mobile Telecommunications Industry

Astrid Jung and Tomaso Duso

CIG Working Papers from Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG)

Abstract: This paper empirically investigates market behavior and firms’ lobbying in a unified structural setup. In a sequential game, where firms lobby for regulation before they compete in the product market, we derive a testable measure of lobbying coordination. Applying the setting to the early U.S. cellular services industry, we find that lobbying expenditures, as measured by campaign contributions, and market conduct were consistent with a one-shot Nash equilibrium and that price caps were binding on average. Furthermore, campaign contributions from cellular firms effectively lowered the burden of the price caps and reduced production costs. ZUSAMMENFASSUNG - (Produktmarktwettbewerb und Koordination im Lobbying in der U.S. Mobilfunkindustrie) Dieses Paper untersucht Marktverhalten und Lobbying durch Unternehmen empirisch in einem vereinheitlichten strukturellen Ansatz. In einem sequentiellen Spiel, wo die Firmen für Regulierung Lobbyismus betreiben, bevor sie im Produktmarkt konkurrieren, leiten wir ein testbares Maß für Lobbying- Koordination her. In einer Anwendung auf den frühen US Mobilfunkmarkt zeigen wir, dass Marktverhalten und Lobbying-Ausgaben (gemessen als Parteispenden) mit einem einfachen Nashgleichgewicht vereinbar sind und die Preisobergrenzen im Durchschnitt binden. Außerdem waren Parteispenden offenbar ein effektives Mittel um die Preisgrenzen zu lockern und kostenbezogene Regulierung abzumildern.

Keywords: Collusion; Lobbying; Price Cap; Regulation; Rent-Seeking; Interest; Groups; Telecommunication (search for similar items in EconPapers)
JEL-codes: C31 D72 L13 L51 L96 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2003-11
New Economics Papers: this item is included in nep-com, nep-ind and nep-mic
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Related works:
Journal Article: Product Market Competition and Lobbying Coordination in the U.S. Mobile Telecommunications Industry (2012)
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Persistent link: https://EconPapers.repec.org/RePEc:wzb:wzebiv:spii2003-16

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