On the Effects of Cost Structure and Uncertainty on Market Structure; the Case of the Greek Mobile Telecommunications Market

In this paper, a framework for the estimation of the effects of costs and uncertainty on the long-run market structure and innovation in the Greek mobile telecommunications market is presented. This framework is based on Real Option Analysis, which is used to capture the effects of both cost structure and uncertainty over demand on the decisions of active providers and potential market entrants. Outputs consist of an estimation of the maximum number of firms and their corresponding minimum required market share, thus enabling the evaluation of the “efficiency” of competition in the market. Results can be used as inputs for managerial and regulatory decisions and strategic planning