Net neutrality, business models, and internet interconnection

Jay Pil Choi, Doh Shin Jeon, Byung Cheol Kim

Research output: Contribution to journalArticle

22 Citations (Scopus)

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 nonneutral 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.

Original languageEnglish
Pages (from-to)104-141
Number of pages38
JournalAmerican Economic Journal: Microeconomics
Volume7
Issue number3
DOIs
Publication statusPublished - 2015 Jan 1

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All Science Journal Classification (ASJC) codes

  • Economics, Econometrics and Finance(all)

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