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Private peering, transit and traffic diversion


  • Narine Badasyan


  • Subhadip Chakrabarti



Private peering refers to settlement-free connectivity agreements between Internet Service Providers meant to interconnect their networks by-passing congested National Access Points. We explore the incentives for bilateral peering with particular emphasis on traffic diversion. A private peering agreement between two providers improves the quality of both and would divert traffic from third parties. This provides an incentive for peering. A three-player model is introduced and analyzed. Complication introduced by price competition and heterogeneous consumers are also studied. Copyright Springer Science+Business Media, Inc. 2005

Suggested Citation

  • Narine Badasyan & Subhadip Chakrabarti, 2005. "Private peering, transit and traffic diversion," Netnomics, Springer, vol. 7(2), pages 115-124, August.
  • Handle: RePEc:kap:netnom:v:7:y:2005:i:2:p:115-124
    DOI: 10.1007/s11066-006-9007-x

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    More about this item


    peering; transit; internet service providers; C7; L14;

    JEL classification:

    • C7 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation


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