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Price discrimination of ott providers under duopolistic competition and multi-dimmesional product differentiation in retail broadband access

Listed author(s):
  • José Marino García García
  • Aurelia Valiño Castro
  • A. Jesús Sánchez Fuentes

Network neutrality regulation prevents price discrimination from Access Providers to Content Providers and product differentiation in terms of connection quality in the retail broadband access market. This paper analyzes the economic implications of price discrimination under duopolistic competition and multi-dimensional product differentiation in retail internet access using a sequential-moves game theoretic model. Under this framework, we discuss the impact of product differentiation and price discrimination on social welfare, and offer systematic simulations using feasible ranges for parameters value to help discern the impact of departing from network neutrality regulation on social welfare.

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File URL: http://infogen.webs.uvigo.es/WP/WP1607.pdf
File Function: First version, 2016
Download Restriction: no

Paper provided by Universidade de Vigo, GEN - Governance and Economics research Network in its series Working Papers. Collection A: Public economics, governance and decentralization with number 1607.

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Length: 42 pages
Date of creation: Nov 2016
Handle: RePEc:gov:wpaper:1607
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Web page: http://infogen.webs.uvigo.es
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  1. Marc Bourreau & Frago Kourandi & Tommaso Valletti, 2015. "Net Neutrality with Competing Internet Platforms," Journal of Industrial Economics, Wiley Blackwell, vol. 63(1), pages 30-73, 03.
  2. Jean‐Charles Rochet & Jean Tirole, 2006. "Two‐sided markets: a progress report," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 645-667, 09.
  3. Nicholas Economides & Benjamin E. Hermalin, 2015. "The strategic use of download limits by a monopoly platform," RAND Journal of Economics, RAND Corporation, vol. 46(2), pages 297-327, 06.
  4. Nicholas Economides & Benjamin E. Hermalin, 2012. "The economics of network neutrality," RAND Journal of Economics, RAND Corporation, vol. 43(4), pages 602-629, December.
  5. Peitz, Martin & Schuett, Florian, 2016. "Net neutrality and inflation of traffic," International Journal of Industrial Organization, Elsevier, vol. 46(C), pages 16-62.
  6. Jay Pil Choi & Doh-Shin Jeon & Byung-Cheol Kim, 2013. "Asymmetric Neutrality Regulation and Innovation at the Edges: Fixed vs. Mobile Networks," Working Papers 13-24, NET Institute.
  7. E. Glen Weyl, 2010. "A Price Theory of Multi-sided Platforms," American Economic Review, American Economic Association, vol. 100(4), pages 1642-1672, September.
  8. Jay Pil Choi & Byung-Cheol Kim, 2010. "Net neutrality and investment incentives," RAND Journal of Economics, RAND Corporation, vol. 41(3), pages 446-471.
  9. Hermalin, Benjamin E. & Katz, Michael L., 2007. "The economics of product-line restrictions with an application to the network neutrality debate," Information Economics and Policy, Elsevier, vol. 19(2), pages 215-248, June.
  10. Sue Mialon & Samiran Banerjee, 2012. "Regulation of Internet Access," Emory Economics 1201, Department of Economics, Emory University (Atlanta).
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