Enterprise in orbit: The supply of communication satellites

Author: Beaudry, Catherine

Source: Economics of Innovation and New Technology, Volume 15, Number 7, October 2006 , pp. 679-700(22)

Publisher: Routledge, part of the Taylor & Francis Group

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Abstract:

This study develops a general understanding of the evolution of the Western World commercial communication sate-llite supply industry. Initial information classifies this industry as an oligopoly with the vendors as price setters. Over three generations, the technical attributes of communication satellites are advancing. Taking the hedonic regression approach, the customer's willingness to pay for characteristics is calculated. Exploring the relationship between price and complexity, it is demonstrated that in the short run, the oligopoly structure of this industry is accompanied by a simple form of cost plus price setting, whereas in the long run, the engineering satellite pricing `rule of thumb' applies.

Keywords: Hedonic prices; Technical change; Mark-up pricing; Oligopoly

Document Type: Research article

DOI: http://dx.doi.org/10.1080/10438590500475000

Affiliations: 1: École Polytechnique de Montréal, Département de mathématiques et de génie industriel, C.P. 6079, Succursale Centre-ville, Montréal, Québec, H3C 3A7, Canada

Publication date: 2006-10-01

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