This collection of essays analyse various competition factors in the mobile phone service industry. Chapter 1 shows that two key switching factors are identified from churn rates data. Chapter 2 estimates network externalities as well as switching costs using the identification result. Chapter 3 proves that exclusive contracts are beneficial to service providers when some conditions are satisfied. Specifically, the following results are derived in each chapter.

Switching costs and the persistence of idiosyncratic preference have a huge impact on switching behavior of consumers. We provide theorems identifying those switching factors using churn rates observed at the market level, winch are defined as the rate at which users of a product switch out in the next period. Nonparametric methods are employed to investigate what can be identified about each switching factor from churn rates. Transition in idiosyncratic preference shocks is fully identified, and time-varying product-dependent switching costs are identified. Moreover, the underlying utility function is nonparametrically identified throughout the chapter. These results imply that consistent estimation is possible without individual level data. Estimation of demand for the U.S. mobile phone service illustrates that excluding substantial switching costs from a model may lead to inconsistent estimation.

We next estimate network externalities and switching costs using the same data. A dynamic discrete choice model is developed on Berry, Levinsohn, and Pakes (1995). We reduce computational burden by first obtaining switching-free values of services and then mapping them to consumer's value function. This requires identification of switching-free values, for which we heavily count on the method developed in Chapter 1. Estimating the model of myopic consumers gives two implications. First, there are substantial network externalities in the U.S mobile phone service industry. Second, switching costs need to be included in the model for an unbiased estimate of network externalities. In particular, the estimate is biased upward if switching costs are ignored.

We study the equilibrium exclusive contracts in a model where two mobile phone service providers bid a linear transfer for a new phone. When it is the only terms of contract, some service provider may benefit from making a contract. If they can bid a lump-sum payment in addition, it is possible that both service providers make more profits after a new phone becomes available. These results are different from those of previous works that platforms get worse off by competing for the exclusive right with a lump-sum bid. The intuition behind our results is that a phone maker has an incentive to benefit from both a large share and a high linear transfer and that competition gets stronger in proportion to a value of a new phone.