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Trust And Virtual Districts: Evidence From The Milan Internet Exchange

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Author Info
Emanuele Giovannetti
Karsten Neuhoff
Giancarlo Spagnolo

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Abstract

Peering decisions between Internet Service Providers (ISPs) contain substantial non-measurable aspects requiring trust and informal cooperation among peering partners. We study whether virtual districts are observed between Internet peers. Our empirical analysis of the bilateral peering decisions at the Milan Internet Exchange confirms that these decisions are significantly influenced by: travel time either between ISPs' headquarters or towards the exchange-a proxy for distance, bandwidth-a proxy for size, and European connectivity. Proximity still plays a role in reducing the transaction costs of monitoring and punishing deviant behavior within an industry where trust is essential for Internet universal connectivity. Copyright © 2007 The Authors; Journal compilation © 2007 Blackwell Publishing Ltd.

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Publisher Info
Article provided by Blackwell Publishing in its journal Metroeconomica.

Volume (Year): 58 (2007)
Issue (Month): 3 (07)
Pages: 436-456
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Handle: RePEc:bla:metroe:v:58:y:2007:i:3:p:436-456

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This page was last updated on 2009-12-19.

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