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Agglomeration in Internet Co-operation Peering Agreements

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Author Info
Giovannetti, E.
Neuhoff, K.
Spagnolo, G.

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Abstract

Peering decisions between Internet Service Providers contain substantial non-measurable aspects requiring trust and informal cooperation among peering partners. We study whether spatial agglomeration is 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 between ISPs headquarters- 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 were co-operation is essential for efficient traffic exchanges required by the Internet universal connectivity.

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Publisher Info
Paper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0505.

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Length: 21
Date of creation: Jan 2005
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Handle: RePEc:cam:camdae:0505

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Related research
Keywords: Peering; Internet; Agglomeration; Network Industries; Districts;

Other versions of this item:

Find related papers by JEL classification:
L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
R12 - Urban, Rural, and Regional Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
Z13 - Other Special Topics - - Cultural Economics - - - Social Norms and Social Capital; Social Networks Economic Anthropology

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Steffen Lippert & Giancarlo Spagnolo, 2006. "Internet Peering as a Network of Relations," Discussion Papers 191, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich. [Downloadable!]
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