A Structural Demand Analysis for Wireless Services Under Nonlinear Pricing Schemes

Provided by: Columbia University
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Service industries are a rapidly growing sector in the US economy and account for over 60% of its total output. Wireless communications in particular have become ubiquitous and there are an estimated 160 million subscribers in the US alone. In this paper, the authors' focus on the wireless communications industry and model the impact of the nonlinear pricing schemes employed by service providers on customers' choice of calling plans, their consumption patterns and more broadly their decision to stay with the provider or defect.

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