Economic analysis of process innovation: The case study of the German telecommunication market
The effects of a new firm's entry into the telecom service market are examined further. These consist of up- and downstream markets, corresponding to the first and second stages in game theory. When a new entrant can succeed in process innovation and lower production cost, entry of the entrant...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Elsevier
2024-03-01
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| Series: | Innovation and Green Development |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2949753123000632 |
| Summary: | The effects of a new firm's entry into the telecom service market are examined further. These consist of up- and downstream markets, corresponding to the first and second stages in game theory. When a new entrant can succeed in process innovation and lower production cost, entry of the entrant transforms the market structure into a Joint-Profit-Maximization monopoly under the European Commission (EC) constraint. However, the post-entry market becomes more competitive if the EC did not intervene the market. We observed that violation of the test does not necessarily mean the incumbent practices a margin squeeze. The EC does not prove that margin squeeze is a necessary and sufficient condition for the exit. Furthermore, Joint-Profit-Maximization monopoly can serve to explain why Japanese Telecoms fees are high. |
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| ISSN: | 2949-7531 |