Agglomeration in Internet Co-operation Peering Agreements
AbstractPeering 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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Bibliographic InfoPaper provided by Faculty of Economics, University of Cambridge in its series Cambridge Working Papers in Economics with number 0505.
Date of creation: Jan 2005
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Web page: http://www.econ.cam.ac.uk/index.htm
Peering; Internet; Agglomeration; Network Industries; Districts;
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, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Size and Spatial Distributions of Regional Economic Activity; Interregional Trade (economic geography)
- Z13 - Other Special Topics - - Cultural Economics - - - Economic Sociology; Economic Anthropology; Social and Economic Stratification
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-02-01 (All new papers)
- NEP-GEO-2005-02-01 (Economic Geography)
- NEP-NET-2005-02-01 (Network Economics)
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