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Internet Regulation, Two-Sided Pricing, and Sponsored Data

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  • Jullien, Bruno
  • Sand-Zantman, Wilfried

Abstract

We consider zero-rating by Internet service providers. We analyze the implications of offering sponsored data plans that allow content providers to pay for traffic on behalf of their consumers. These plans boost consumption of high-value content and decrease the networks'incentives to exclude low-value content. The welfare effect of allowing this price discrimination depends on the proportion of content targeted and the value of contents. Our analysis is extended to various cases (one-sided pricing, competing network, heterogenous cost, paid contents).

Suggested Citation

  • Jullien, Bruno & Sand-Zantman, Wilfried, 2012. "Internet Regulation, Two-Sided Pricing, and Sponsored Data," TSE Working Papers 12-327, Toulouse School of Economics (TSE), revised Dec 2017.
  • Handle: RePEc:tse:wpaper:26061
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    References listed on IDEAS

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    1. Reggiani, Carlo & Valletti, Tommaso, 2016. "Net neutrality and innovation at the core and at the edge," International Journal of Industrial Organization, Elsevier, vol. 45(C), pages 16-27.
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    10. Shane Greenstein & Martin Peitz & Tommaso Valletti, 2016. "Net Neutrality: A Fast Lane to Understanding the Trade-Offs," Journal of Economic Perspectives, American Economic Association, vol. 30(2), pages 127-150, Spring.
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    Cited by:

    1. Shane Greenstein & Martin Peitz & Tommaso Valletti, 2016. "Net Neutrality: A Fast Lane to Understanding the Trade-Offs," Journal of Economic Perspectives, American Economic Association, vol. 30(2), pages 127-150, Spring.
    2. Steffen Hoernig; Francisco Monteiro, 2018. "Zero-rating, network effects, and capacity investments," FEUNL Working Paper Series wp627, Universidade Nova de Lisboa, Faculdade de Economia.
    3. repec:eee:indorg:v:52:y:2017:i:c:p:358-392 is not listed on IDEAS

    More about this item

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • M52 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Personnel Economics - - - Compensation and Compensation Methods and Their Effects

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