Non-User Utility and Market Power: The Case of Smartphones
Date: Thursday, May 15, 2025, 09:30 ~ 11:15
Speaker: Leonardo Bursztyn (UChicago)
Location: Webinar
◈ Keynote : "Non-User Utility and Market Power: The Case of Smartphones," with Rafael Jiménez-Durán, Aaron Leonard, Filip Milojević, and Christopher Roth.
◈ AEW Discussion :"How Voters Process Information about Politicians? The Roles of Learning and Attention," by Siddharth George.
◈ 발표자 : Leonardo Bursztyn (UChicago)◈ 일 시 : 2025년 5월 15일 목요일 09:30 ~ 11:15
◈ 장 소 : Webinar via WebEx
Webinar 참석을 위해 아래 링크를 통한 사전 등록이 필요합니다:
Non-User Utility and Market Power: The Case of Smartphones
Abstract:
Firms can enhance their market power by increasing their users’ utility but also by decreasing the utility of competing products’ users. We study this mechanism in the smartphone market, analyzing Apple’s strategy of differentiating messages sent to Androids with “green bubbles.” In surveys with U.S. college students, green bubbles are widely stigmatized, and most respondents—regardless of device—prefer their removal. In an incentivized experiment, iPhone users exhibit a significant willingness to pay to avoid green bubbles. Finally, we examine the market implications and document that removing green bubbles substantially increases respondents’ likelihood of choosing an Android over an iPhone.
Abstract:
Firms can enhance their market power by increasing their users’ utility but also by decreasing the utility of competing products’ users. We study this mechanism in the smartphone market, analyzing Apple’s strategy of differentiating messages sent to Androids with “green bubbles.” In surveys with U.S. college students, green bubbles are widely stigmatized, and most respondents—regardless of device—prefer their removal. In an incentivized experiment, iPhone users exhibit a significant willingness to pay to avoid green bubbles. Finally, we examine the market implications and document that removing green bubbles substantially increases respondents’ likelihood of choosing an Android over an iPhone.