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Economics Working Papers >
Please use this identifier to cite or link to this item:
http://hdl.handle.net/2451/26057
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| Title: | Net Neutrality on the Internet: A Two-sided Market Analysis |
| Authors: | Economides, Nicholas
Tag, Joacim |
| Keywords: | net neutrality
two-sided markets
Internet, monopoly
duopoly
regulation
discrimination |
| Issue Date: | Nov-2007 |
| Series/Report no.: | EC-07-27 |
| Abstract: | Two-sided market model in which platforms sell Internet access services
to consumers and may set fees to content and applications providers 'on
the other side' of the Internet. When access is monopolized, we find
that generally net neutrality regulation (that imposes zero fees 'on the
other side' of the market) increases total industry surplus compared to
the fully private optimum at which the monopoly platform imposes
positive fees on content and applications providers. Similarly, we find
that imposing net neutrality in duopoly increases total surplus compared
to duopoly competition between platforms that charge positive fees on
content providers. We also discuss the incentives of duopolists to
collude in setting the fees 'on the other side' of the Internet while
competing for Internet access customers. Additionally, we discuss how
price and non-price discrimination strategies may be used once net
neutrality is abolished. Finally, we discuss how the results generalize
to other two-sided markets. |
| URI: | http://hdl.handle.net/2451/26057 |
| Appears in Collections: | Economics Working Papers
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