Rural Internet access: over-subscription strategies, regulation and equilibrium

SeungJae Shin, Martin B. Weiss and Jack Tucci
Additional contact information
SeungJae Shin: Division of Business and Industry, Mississippi State University, Meridian, MS 39307, USA, Postal: Division of Business and Industry, Mississippi State University, Meridian, MS 39307, USA
Martin B. Weiss: Department of Information Sciences and Telecom. University of Pittsburgh, Pittsburgh, PA 15260, USA, Postal: Department of Information Sciences and Telecom. University of Pittsburgh, Pittsburgh, PA 15260, USA
Jack Tucci: Division of Business and Industry, Mississippi State University, Meridian MS 39307, USA, Postal: Division of Business and Industry, Mississippi State University, Meridian MS 39307, USA

Managerial and Decision Economics, 2007, vol. 28, issue 1, pages 1-12

Abstract: This paper presents an analysis of the Internet access market using a game theoretic model. In particular, we consider the Nash equilibrium of the service providers and examine their behavior on network investment and output level. We calibrate this model to fit the industry structure and data found in rural markets. In the first part of the paper, we examine the Internet industry structure and its characteristics. Based on the industry structure, we create a Cournot duopoly model, in which real world cost and revenue projections are used to find Internet access market equilibrium. In conclusion, we analyze social welfare of the equilibrium. These analyses allow us to explain the motivation for the rural ISPs' behavior, such as over-subscription and under-investment and to present an analytical framework for Internet industry policy makers. Copyright © 2007 John Wiley & Sons, Ltd.

Date: 2007
View list of references

Downloads: (external link)
http://hdl.handle.net/10.1002/mde.1306 Link to full text; subscription required (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:wly:mgtdec:v:28:y:2007:i:1:p:1-12

Access Statistics for this article

Managerial and Decision Economics is edited by Paul H. Rubin

More articles in Managerial and Decision Economics from John Wiley & Sons, Ltd.
Series data maintained by Christopher F. Baum ().