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Monopoly Quality Degradation in Cable Television

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Author Info

  • Matt Shum
  • G Crawford

Abstract

Using an empirical framework derived from models of nonlinear pricing, we estimate the degree of quality degradation in cable television markets. We find lower bounds on quality degradation ranging from 11% to 45% of observed service qualities. Furthermore, cable operators in markets with local regulatory oversight tend to offer significantly higher quality products, and engage in less quality degradation. While prices are also higher in markets with local regulatory oversight, we find that consumers experienced greater quality per dollar in these markets compared to consumers in markets without regulatory oversight.

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Bibliographic Info

Paper provided by The Johns Hopkins University,Department of Economics in its series Economics Working Paper Archive with number 502.

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Date of creation: Nov 2003
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Handle: RePEc:jhu:papers:502

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Cited by:
  1. Crawford, Gregory S, 2012. "Endogenous Product Choice: A Progress Report," CEPR Discussion Papers 8862, C.E.P.R. Discussion Papers.
  2. Jan K. Brueckner & Dan Luo, 2013. "Measuring Strategic Firm Interaction in Product-Quality Choices: The Case of Airline Flight Frequency," CESifo Working Paper Series 4066, CESifo Group Munich.
  3. Miravete, Eugenio J, 2007. "Competing with Menus of Tariff Options," CEPR Discussion Papers 6279, C.E.P.R. Discussion Papers.

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