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Net Neutrality, Business Models, and Internet Interconnection

Jay Choi (), Doh-Shin Jeon () and Byung-Cheol Kim ()

American Economic Journal: Microeconomics, 2015, vol. 7, issue 3, 104-41

Abstract: We analyze the effect of net neutrality regulation in a two-sided market framework when content is heterogeneous in its sensitivity to delivery quality. We characterize the equilibrium in a neutral network constrained to offer the same quality vis-à-vis a non neutral network where Internet service providers are allowed to engage in second degree price discrimination with a menu of quality-price pairs. We find that the merit of net neutrality regulation depends crucially on content providers' business models. More generally, our analysis can be considered a contribution to the literature on second-degree price discrimination in two-sided platform markets. (JEL D42, D43, D85, L51, L86, L88)

JEL-codes: D42 D43 D85 L51 L86 L88 (search for similar items in EconPapers)
Date: 2015
Note: DOI: 10.1257/mic.20130162
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American Economic Journal: Microeconomics is currently edited by Johannes Hörner

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