Local Competition, Multimarket Contact, and Product Quality: Evidence From Internet Service Provision

Kyle Wilson ()
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Kyle Wilson: Pomona College

Review of Industrial Organization, 2025, vol. 66, issue 4, No 3, 439-467

Abstract: Abstract I investigate the effect of competition on quality in the internet service provision industry: I examine both local competition within markets and multimarket contact among firms across markets. This industry offers an ideal setting, as quality is both objective and measurable. I use data from speedtest.net from 2008 to 2014 to estimate a reduced-form model of the effects of local competition and multimarket contact on realized consumer download speeds. I find that increased multimarket contact leads to decreased download speeds, which is consistent with the mutual forbearance hypothesis. I also find that duopolies lead to faster download speeds than do monopolies, but that further increases in the number of competitors decrease speeds.

Keywords: Multimarket contact; Telecommunications; Internet; Broadband; Product quality (search for similar items in EconPapers)
JEL-codes: L13 L15 L96 (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s11151-023-09928-8

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