Net Neutrality, Business Models, and Internet Interconnection
American Economic Journal: Microeconomics
vol. 7,
no. 3, August 2015
(pp. 104-41)
Abstract
We analyze the effect of net neutrality regulation in a two-sided market framework when content is heterogeneous in its sensitivity to delivery quality. We characterize the equilibrium in a neutral network constrained to offer the same quality vis-à-vis a non neutral network where Internet service providers are allowed to engage in second degree price discrimination with a menu of quality-price pairs. We find that the merit of net neutrality regulation depends crucially on content providers' business models. More generally, our analysis can be considered a contribution to the literature on second-degree price discrimination in two-sided platform markets. (JEL D42, D43, D85, L51, L86, L88)Citation
Choi, Jay Pil, Doh-Shin Jeon, and Byung-Cheol Kim. 2015. "Net Neutrality, Business Models, and Internet Interconnection." American Economic Journal: Microeconomics, 7 (3): 104-41. DOI: 10.1257/mic.20130162Additional Materials
JEL Classification
- D42 Market Structure, Pricing, and Design: Monopoly
- D43 Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
- D85 Network Formation and Analysis: Theory
- L51 Economics of Regulation
- L86 Information and Internet Services; Computer Software
- L88 Industry Studies: Services: Government Policy
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