Net Neutrality and Investment Incentives

By Jay Pil Choi, Byung-Cheol Kim. Social Science Research Network, 2010

307 citations recorded by the source corpus.

This article analyzes the effects of net neutrality regulation on investment incentives for Internet service providers (ISPs) and content providers (CPs), and their implications for social welfare. Concerning the ISPs' investment incentives, we find that capacity expansion decreases the sale price of the priority right under the discriminatory regime. Thus, contrary to ISPs' claims that net neutrality regulations would have a chilling effect on their incentive to invest, we cannot dismiss the possibility of the opposite. A discriminatory regime can also weaken CPs' investment incentives because of CPs' concern that the ISP would expropriate some of the investment benefits.

Subfields: Management Science and Operations Research, Media Technology, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/d2b1d760eac766348bae813ebfa18185b0d0b5a2

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Management Science and Operations Research

1. Justus Haucap
2. Mark Armstrong
3. Torben Stühmeier
4. Martin Peitz
5. Tommaso M. Valletti
6. Jidong Zhou
7. P. Joskow

In Media Technology

1. Torben Stühmeier
2. Justus Haucap
3. Mark Armstrong
4. Martin Peitz
5. Tommaso M. Valletti
6. Tobias Wenzel
7. Ralf Dewenter
8. Ulrich Heimeshoff

In Strategy and Management

1. Torben Stühmeier
2. Justus Haucap
3. Martin Peitz
4. Tommaso M. Valletti
5. Mark Armstrong
6. Tobias Wenzel
7. Andrei Hagiu
8. Ralf Dewenter

Citations in the corpus

• Network neutrality on the Internet: A two-sided market analysis (2012, unknown): “Choi and Kim (2010) study both a static and a dynamic setting focusing on how innovation incentives are affected by network neutrality.”
• Net Neutrality with Competing Internet Platforms (2015, unknown): “Choi and Kim (2010) and Cheng et al. (2011) study models with a monopolistic ISP and two CPs who can access a fast lane by paying a priority fee and the ISP invests in capacity.”
• Net Neutrality: A Fast Lane to Understanding the Trade-offs (2016, background): “Choi et al. (2014) take first steps in addressing it, by showing how the result depends on”
• Competition and antitrust in internet markets (2016, background): “Choi and Kim (2010) find ambiguous effects of prioritization of welfare.”
• Paying for Prominence (2011, background): “(This is reminiscent of Diamond’s (1971) famous result that arbitrarily small search costs can lead to monopoly prices.”