The Effects of Competition on the Price for Cable Modem Internet Access
AbstractTheory suggests that a firm facing competition will raise prices as consumer preferences become more diverse, and with high enough diversity, a duopolist under product differentiation may price higher than a monopolist. Focusing on the price for cable modem Internet access, with or without DSL competition, and using the standard deviation of education attainment as a proxy for preference diversity, we find empirical support for these results. In markets where cable competes with DSL, the cable Internet price increases with preference diversity. Moreover, the cable Internet price under DSL competition can exceed that without competition when preferences are sufficiently diverse. © 2011 The President and Fellows of Harvard College and the Massachusetts Institute of Technology.
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Bibliographic InfoArticle provided by MIT Press in its journal The Review of Economics and Statistics.
Volume (Year): 93 (2011)
Issue (Month): 1 (February)
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Other versions of this item:
- Yongmin Chen & Scott J. Savage, 2007. "The Effects Of Competition On The Price For Cable Modem Internet Access," Working Papers, NET Institute 07-13, NET Institute.
- L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- âThe Effects of Competition on Price for Cable Modem Internet Access,â Y. Chen & S. Savage (2009)
by afinetheorem in A Fine Theorem on 2010-11-12 19:30:49
- The Effects of Competition on Price for Cable Modem Internet Access, Y. Chen & S. Savage (2009)
by afinetheorem in A Fine Theorem on 2010-11-12 19:30:49
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