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Network Neutrality and Network Management Regulation: Quality of Service, Price Discrimination, and Exclusive Contracts

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Author Info

  • Economides, Nicholas

    (Stern School of Business)

  • Tåg, Joacim

    ()
    (Research Institute of Industrial Economics (IFN))

Abstract

We compare four approaches to network neutrality and network management regulation in a two-sided market model: (i) no variations in Quality of Service and no price discrimination; (ii) variations in Quality of Service but no price discrimination; (iii) variations in Quality of Service and price discrimination but no exclusive contracts; and (iv) no regulation: the network operator can sell exclusive rights to content providers. We compare the equilibrium outcomes explicitly accounting for dynamic incentives to invest in improving the Quality of Service offered to each content provider. We provide a ranking Quality of Service and network operator profits across regimes.

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Bibliographic Info

Paper provided by Research Institute of Industrial Economics in its series Working Paper Series with number 890.

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Length: 28 pages
Date of creation: 05 Dec 2011
Date of revision:
Publication status: Published in Research Handbook on Governance of the Internet, Brown, Ian (eds.), 2012, chapter 6, Edward Elgar.
Handle: RePEc:hhs:iuiwop:0890

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Postal: Research Institute of Industrial Economics, Box 55665, SE-102 15 Stockholm, Sweden
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Related research

Keywords: Network neutrality; Internet price discrimination; Exclusivity; Quality of Service; Network management; Congestion; AT&T; Verizon; Google;

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  1. M. Keith Chen & Barry J. Nalebuff, 2006. "One-Way Essential Complements," Cowles Foundation Discussion Papers 1588, Cowles Foundation for Research in Economics, Yale University.
  2. Jay Pil Choi & Byung-Cheol Kim, 2010. "Net neutrality and investment incentives," RAND Journal of Economics, RAND Corporation, vol. 41(3), pages 446-471.
  3. Hermalin, Benjamin E & Katz, Michael L, 2006. "The Economics of Product-Line Restrictions With an Application to the Network Neutrality Debate," Competition Policy Center, Working Paper Series qt81r3b7xs, Competition Policy Center, Institute for Business and Economic Research, UC Berkeley.
  4. Christiaan Hogendorn, 2006. "Broadband Internet: Net Neutrality versus Open Access," Working Papers 2006-09, Center for Network Industries and Infrastructure (CNI).
  5. Krämer, Jan & Wiewiorra, Lukas, 2009. "Innovation through Discrimination!? A Formal Analysis of the Net Neutrality Debate," MPRA Paper 16655, University Library of Munich, Germany.
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