IDEAS home Printed from https://ideas.repec.org/a/eee/tefoso/v175y2022ics0040162521008362.html
   My bibliography  Save this article

The paradox of (Inter)net neutrality: An experiment on ex-ante antitrust regulation✰

Author

Listed:
  • Comeig, Irene
  • Klaser, Klaudijo
  • Pinar, Lucía D.

Abstract

Net neutrality has been the most relevant and heavily debated Internet regulation policy of the last decade. Net neutrality aims to prohibit discrimination between data packages in terms of content, origin, destination, or type of equipment used. However, the Big Tech companies, sheltered by the net neutrality policy, have flourished. They now have the power to exclude minor companies, and therefore their contents, from the Internet market in de facto defiance of the net neutrality principle. Academic results regarding this net neutrality paradox are still ambiguous. To represent the current Internet market distortions and analyze a potential tool to adjust and strengthen the net neutrality principle, an economic experiment based on an extended version of the dictator game was conducted. In particular, the effect of an ex-ante control and sanctioning mechanism on the collusive behavior of big companies was studied. The regulation mechanism proves effective, significatively reducing the abusive behavior of large Internet companies. This result contributes to the debate on net neutrality, reinforcing the idea that policymakers, given the current asymmetric Internet market structure, should revise and update net neutrality regulations.

Suggested Citation

  • Comeig, Irene & Klaser, Klaudijo & Pinar, Lucía D., 2022. "The paradox of (Inter)net neutrality: An experiment on ex-ante antitrust regulation✰," Technological Forecasting and Social Change, Elsevier, vol. 175(C).
    • Handle: RePEc:eee:tefoso:v:175:y:2022:i:c:s0040162521008362
    DOI: 10.1016/j.techfore.2021.121405
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0040162521008362
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.techfore.2021.121405?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Krämer, Jan & Peitz, Martin, 2018. "A fresh look at zero-rating," Telecommunications Policy, Elsevier, vol. 42(7), pages 501-513.
    2. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1986. "Fairness and the Assumptions of Economics," The Journal of Business, University of Chicago Press, vol. 59(4), pages 285-300, October.
    3. Ola Andersson & Erik Wengström, 2007. "Do Antitrust Laws Facilitate Collusion? Experimental Evidence on Costly Communication in Duopolies," Scandinavian Journal of Economics, Wiley Blackwell, vol. 109(2), pages 321-339, June.
    4. Shane Greenstein & Martin Peitz & Tommaso Valletti, 2016. "Net Neutrality: A Fast Lane to Understanding the Trade-Offs," Journal of Economic Perspectives, American Economic Association, vol. 30(2), pages 127-150, Spring.
    5. Todd L. Cherry & Peter Frykblom & Jason F. Shogren, 2002. "Hardnose the Dictator," American Economic Review, American Economic Association, vol. 92(4), pages 1218-1221, September.
    6. Arno Riedl, 2010. "Behavioral and Experimental Economics Do Inform Public Policy," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 66(1), pages 65-95, March.
    7. Joshua Gans, 2015. "Weak versus strong net neutrality," Journal of Regulatory Economics, Springer, vol. 47(2), pages 183-200, April.
    8. Berg, Nathan, 2003. "Normative behavioral economics," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 32(4), pages 411-427, September.
    9. Christoph Engel, 2011. "Dictator games: a meta study," Experimental Economics, Springer;Economic Science Association, vol. 14(4), pages 583-610, November.
    10. M. Krause & S. Kröger & J. Potters, 2004. "Insights from Experimental Economics for Market Regulation," Review of Business and Economic Literature, KU Leuven, Faculty of Economics and Business (FEB), Review of Business and Economic Literature, vol. 0(2), pages 217-238.
    11. Jens Weghake & Claudia Keser & Martin Schmidt & Mathias Erlei, 2018. "Pricing in Asymmetric Two-Sided Markets: A Laboratory Experiment," TUC Working Papers in Economics 0018, Abteilung für Volkswirtschaftslehre, Technische Universität Clausthal (Department of Economics, Technical University Clausthal).
    12. Vernon L. Smith, 1962. "An Experimental Study of Competitive Market Behavior," Journal of Political Economy, University of Chicago Press, vol. 70, pages 111-111.
    13. Fonseca, Miguel A. & Normann, Hans-Theo, 2012. "Explicit vs. tacit collusion—The impact of communication in oligopoly experiments," European Economic Review, Elsevier, vol. 56(8), pages 1759-1772.
    14. Laura Nurski, 2012. "Net Neutrality, Foreclosure and the Fast Lane: An empirical study of the UK," Working Papers 12-13, NET Institute.
    15. Bohm, Peter, 2003. "Experimental evaluations of policy instruments," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 1, chapter 10, pages 437-460, Elsevier.
    16. Maximilian Andres & Lisa Bruttel & Jana Friedrichsen, 2020. "Choosing between explicit cartel formation and tacit collusion – An experiment," CEPA Discussion Papers 19, Center for Economic Policy Analysis.
    17. Nicholas Economides & Benjamin E. Hermalin, 2012. "The economics of network neutrality," RAND Journal of Economics, RAND Corporation, vol. 43(4), pages 602-629, December.
    18. Jean‐Charles Rochet & Jean Tirole, 2006. "Two‐sided markets: a progress report," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 645-667, September.
    19. Mark Armstrong, 2006. "Competition in two‐sided markets," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 668-691, September.
    20. Chen, Daniel L. & Schonger, Martin & Wickens, Chris, 2016. "oTree—An open-source platform for laboratory, online, and field experiments," Journal of Behavioral and Experimental Finance, Elsevier, vol. 9(C), pages 88-97.
    21. Kaiser, Ulrich & Wright, Julian, 2006. "Price structure in two-sided markets: Evidence from the magazine industry," International Journal of Industrial Organization, Elsevier, vol. 24(1), pages 1-28, January.
    22. Smith, Vernon L, 1982. "Microeconomic Systems as an Experimental Science," American Economic Review, American Economic Association, vol. 72(5), pages 923-955, December.
    23. Thomas W. Hazlett & Joshua D. Wright, 2017. "The Effect of Regulation on Broadband Markets: Evaluating the Empirical Evidence in the FCC’s 2015 “Open Internet” Order," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 50(4), pages 487-507, June.
    24. Nicholas Economides, 2017. "Net Neutrality is in the Public Interest Submission to FCC, Docket 17-108," Working Papers 17-05, New York University, Leonard N. Stern School of Business, Department of Economics.
    25. Schuett Florian, 2010. "Network Neutrality: A Survey of the Economic Literature," Review of Network Economics, De Gruyter, vol. 9(2), pages 1-15, June.
    26. Roux, Catherine & Thöni, Christian, 2015. "Collusion among many firms: The disciplinary power of targeted punishment," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 83-93.
    27. Pickhardt, Michael & Prinz, Aloys, 2014. "Behavioral dynamics of tax evasion – A survey," Journal of Economic Psychology, Elsevier, vol. 40(C), pages 1-19.
    28. Krämer, Jan & Wiewiorra, Lukas & Weinhardt, Christof, 2013. "Net neutrality: A progress report," Telecommunications Policy, Elsevier, vol. 37(9), pages 794-813.
    29. Hooton, Christopher Alex, 2020. "Testing the economics of the net neutrality debate," Telecommunications Policy, Elsevier, vol. 44(5).
    30. Waichman, Israel & Requate, Till & Siang, Ch’ng Kean, 2014. "Communication in Cournot competition: An experimental study," Journal of Economic Psychology, Elsevier, vol. 42(C), pages 1-16.
    31. K. G. Mäler & J. R. Vincent (ed.), 2003. "Handbook of Environmental Economics," Handbook of Environmental Economics, Elsevier, edition 1, volume 1, number 1.
    32. Gerald Faulhaber, 2012. "“Solving†Net Neutrality: Regulation, Antitrust, Or More Competition," Antitrust Chronicle, Competition Policy International, vol. 3.
    33. Robin S. Lee & Tim Wu, 2009. "Subsidizing Creativity through Network Design: Zero-Pricing and Net Neutrality," Journal of Economic Perspectives, American Economic Association, vol. 23(3), pages 61-76, Summer.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Klaser, Klaudijo & Pinar García, Lucía Desamparados, 2023. "Zero-rating and prioritization in Europe during the Covid-19 pandemic: a Rawlsian perspective on net neutrality," Technological Forecasting and Social Change, Elsevier, vol. 188(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Briglauer, Wolfgang & Stocker, Volker & Stockhammer, Paul, 2019. "Ist Netzneutralität tatsächlich gut? Eine Neubewertung vor dem Hintergrund der Regulierung in den USA und in der EU sowie aktueller Forschungsergebnisse," Policy Notes 38, EcoAustria – Institute for Economic Research.
    2. Justus Haucap & Torben Stühmeier, 2016. "Competition and antitrust in Internet markets," Chapters, in: Johannes M. Bauer & Michael Latzer (ed.), Handbook on the Economics of the Internet, chapter 9, pages 183-210, Edward Elgar Publishing.
    3. Briglauer, Wolfgang & Cambini, Carlo & Gugler, Klaus & Stocker, Volker, 2021. "Net Neutrality and High Speed Broadband Networks: Evidence from OECD Countries," 23rd ITS Biennial Conference, Online Conference / Gothenburg 2021. Digital societies and industrial transformations: Policies, markets, and technologies in a post-Covid world 238012, International Telecommunications Society (ITS).
    4. Jeitschko, Thomas D. & Kim, Soo Jin & Yankelevich, Aleksandr, 2021. "Zero-Rating and Vertical Content Foreclosure," Information Economics and Policy, Elsevier, vol. 55(C).
    5. Reggiani, Carlo & Valletti, Tommaso, 2016. "Net neutrality and innovation at the core and at the edge," International Journal of Industrial Organization, Elsevier, vol. 45(C), pages 16-27.
    6. D'Annunzio, Anna & Russo, Antonio, 2015. "Net Neutrality and internet fragmentation: The role of online advertising," International Journal of Industrial Organization, Elsevier, vol. 43(C), pages 30-47.
    7. Broos, Sébastien & Gautier, Axel, 2017. "The exclusion of competing one-way essential complements: Implications for net neutrality," International Journal of Industrial Organization, Elsevier, vol. 52(C), pages 358-392.
    8. Armando J. Garcia Pires, 2021. "Net neutrality and content provision," Manchester School, University of Manchester, vol. 89(6), pages 569-593, December.
    9. Lorenzon, Emmanuel, 2022. "Zero-rating, content quality, and network capacity," Information Economics and Policy, Elsevier, vol. 58(C).
    10. Stocker Volker & Knieps Guenter, 2018. "Network Neutrality Through the Lens of Network Economics," Review of Network Economics, De Gruyter, vol. 17(3), pages 115-150, September.
    11. Chaturvedi, Rakesh & Dutta, Souvik & Kanjilal, Kiriti, 2021. "An economic model of the last-mile internet," Journal of Economic Behavior & Organization, Elsevier, vol. 191(C), pages 620-638.
    12. Gautier, Axel & Somogyi, Robert, 2020. "Prioritization vs zero-rating: Discrimination on the internet," International Journal of Industrial Organization, Elsevier, vol. 73(C).
    13. Vogelsang Ingo, 2013. "The Endgame of Telecommunications Policy? A Survey," Review of Economics, De Gruyter, vol. 64(3), pages 193-270, December.
    14. Emmanuel LORENZON, 2020. "Zero Rating, Content Quality and Network Capacity," Bordeaux Economics Working Papers 2020-21, Bordeaux School of Economics (BSE).
    15. José Francisco Tudón Maldonado, 2017. "Congestion v Content Provision in Net Neutrality: The Case of Amazon's Twitch.tv," 2017 Papers ptu168, Job Market Papers.
    16. Robert F. Easley & Hong Guo & Jan Krämer, 2018. "Research Commentary—From Net Neutrality to Data Neutrality: A Techno-Economic Framework and Research Agenda," Information Systems Research, INFORMS, vol. 29(2), pages 253-272, June.
    17. Frago Kourandi & Jan Krämer & Tommaso Valletti, 2015. "Net Neutrality, Exclusivity Contracts, and Internet Fragmentation," Information Systems Research, INFORMS, vol. 26(2), pages 320-338, June.
    18. James C. Cox & Vjollca Sadiraj, 2018. "Incentives," Experimental Economics Center Working Paper Series 2018-01, Experimental Economics Center, Andrew Young School of Policy Studies, Georgia State University.
    19. Koning, Kendall J. & Yankelevich, Aleksandr, 2018. "From internet “Openness” to “Freedom”: How far has the net neutrality pendulum swung?," Utilities Policy, Elsevier, vol. 54(C), pages 37-45.
    20. Robb, Genna & Hawthorne, Ryan, 2019. "Net neutrality and market power: The case of South Africa," Telecommunications Policy, Elsevier, vol. 43(9).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:tefoso:v:175:y:2022:i:c:s0040162521008362. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.sciencedirect.com/science/journal/00401625 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.