Pricing in the Shadow of Firm Turnover: ISPs During the 1990s
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Overview: The relationship between changes in price levels and the evolution of the market for dial-up ISPs in the United States from November 1993 to January 1999 are examined by this paper. This is a period of much entry and exit and new product introduction. The paper shows that new firms enter the market at a small but significant price discount to established incumbents. At the same time, introduction of new products/technologies are priced at a significant price premium to the existing offerings, but the premium declines rapidly.