Research On Mobile Communications Consumer Behavior Based On Network Effect Theory

Network effect may exert an influence on mobile communications consumer behavior, which is featured differently from traditional (non-network-effect) products consumer behavior and may bring distinctive market outcome forth, resulting in theoretical and practical study value. Owing to the effect on consumer behavior brought by the general economic conditions and cultural background, it is necessary to conduct a particular study on the specific market, meanwhile, such studies in accordance with Chinese market are infrequent. This paper is based on Chinese market and analyzes three decisions mostly effected by network effect in mobile communications consumer behavior, including new products adoption decision, network choice decision and technology switch decision, and also develops some related operators' strategy and governmental regulation.This paper contains following studies and results: (1) On account of historical statistics, we estimate Bass models of eleven products including mobile communications and compares the coefficients, and draws the conclusion that the diffusion process of Chinese mobile communications is not featured with the significant "penguin effect" but is of significant "bandwagon effect", comparing to the typical network effect products. We may attribute this phenomenon to the influence of products compatibilities, economical and cultural factors on new products adoption decisions of consumers. (2) Based on the survey data of Chongqing mobile communications consumers, we conduct a conditional logit model to analyze the consumers' network choice decisions, manifesting that consumers prefer networks with a larger number of subscribers other things being equal, even if when consumers make a choice between the two different networks operated by a same operator. All the results show that the network effect is still significant, with a hint of possible sources of network effect, in Chinese specific competitive operation pattern. (3) We apply a proved Bayesian game theory model to explain the technology switch decisions of mobile communications consumers. To compare with multi-equilibrium under traditional technology adoption models, this model will produce an unique Bayesian Nash Equilibrium, parameters analysis of which reveal that the circumstance of lock in the old technology will probably occur when the old technology with abundant users basis, the market with strong network effect or consumers individually differ a lot. (4) We develop athree-stage game theory model containing Undercut-Proof Equilibrium mechanism to analyze the issues of mobile network interconnection and access price regulation. It is concluded that there exists a rational interval of access price, in which the network operators will have impetus to interconnect with each other and social welfare will be improved, and the network effect intensity, operator's market share, consumers' switch cost and the total amount of subscribers will influence on the location of interval.