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Economic Experiments and Neutrality in Internet Access

Economic experiments yield lessons to firms that can be acquired only through market experience. Economic experiments cannot take place in a laboratory; scientists, engineers, or marketing executives cannot distill equivalent lessons from simply building a prototype or interviewing potential customers and vendors. The historical record illustrates that economic experiments were important for value creation in Internet access markets. In general, industry-wide returns from economic experiments exceed private returns, with several important exceptions. Those conclusions motivate an inquiry into whether regulatory policy can play a role in fostering the creation of value. The net neutrality debate is reinterpreted through this lens. A three part test is proposed for encouraging economic experiments from both broadband carriers and providers of complementary services.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 13158.

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Date of creation: Jun 2007
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Publication status: published as Economic Experiments and Neutrality in Internet Access , Shane Greenstein. in Innovation Policy and the Economy, Volume 8 , Jaffe, Lerner, and Stern. 2007
Handle: RePEc:nbr:nberwo:13158
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  1. Alleman, James & Rappoport, Paul, 2005. "Regulatory Failure: Time for a New Policy Paradigm," MPRA Paper 2517, University Library of Munich, Germany.
  2. Stranger, Greg & Greenstein, Shane, 2008. "Pricing in the shadow of firm turnover: ISPs during the 1990s," International Journal of Industrial Organization, Elsevier, vol. 26(3), pages 625-642, May.
  3. Ashish Arora & Andrea Fosfuri & Alfonso Gambardella, 2004. "Markets for Technology: The Economics of Innovation and Corporate Strategy," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262511819, June.
  4. Tom Downes & Shane Greenstein, 2000. "Universal Access and Local Commercial Internet Markets," Discussion Papers Series, Department of Economics, Tufts University 0017, Department of Economics, Tufts University.
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