How do mobile-voice operators compete? IVQR estimates

This article proposes a novel procedure to test whether firms compete à la Cournot or perfectly collude when firms' conduct is allowed to be heterogeneous along the conditional distribution of price–cost margins. We apply the procedure to a panel of quarterly data for 177 mobile-voice operators in 45 countries from 1999:1 to 2004:2. Particularly, we find that the hypothesis of perfect collusion can be rejected even for very high-margin operators while the hypothesis that very low-margin operators compete à la Cournot cannot be rejected.