The Benefits from Bundling Demand in K-12 Broadband Procurement

Gaurab Aryal (aryalg@bu.edu), Charles Murry, Pallavi Pal and Arnab Palit

No 33498, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We study a new market design for K-12 school broadband procurement that switched from school-specific bidding to a system that bundled schools into groups. Using an event study approach, we estimate the program reduced internet prices by 37% per Mbps per month while increasing bandwidth by 500%. These benefits occurred by mitigating exposure risk in broadband procurement – the risk that providers win too few contracts to cover fixed infrastructure costs. Using a bounds approach, we show robustness of our estimates and document that participants saved at least as much as their federal subsidies and experienced substantial welfare gains.

JEL-codes: D44 H42 L86 L96 (search for similar items in EconPapers)
Date: 2025-02
New Economics Papers: this item is included in nep-des, nep-ict and nep-reg
Note: IO
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