Strategic Investment Dependence and Net Neutrality

Discussion Papers on Business and Economics, University of Southern Denmark, 11/2015

19 Pages Posted: 30 Jun 2015

See all articles by Martin Nielsen

Martin Nielsen

University of Southern Denmark - Department of Business and Economics

Date Written: June 29, 2015

Abstract

This paper analyzes the way payments by content providers to an Internet service provider may affect investment in Internet speed and content quality. It derives payment mechanisms capable of aligning investment incentives between the two groups; in fact, some of them are Pareto-improving also for consumers, who are willing to pay for quality of content. On the other hand, some parameter combinations may require public intervention for Pareto improvement to be attained.

Keywords: Internet regulation, Network neutrality, Investment incentives, Monopoly, Duopoly, Regulation, Internet content, Netflix, Internet service providers, AT&T, Verizon, Comcast

JEL Classification: L1, D4, D42, D43, C72, LO12, L13, L14

Suggested Citation

Nielsen, Martin, Strategic Investment Dependence and Net Neutrality (June 29, 2015). Discussion Papers on Business and Economics, University of Southern Denmark, 11/2015, Available at SSRN: https://ssrn.com/abstract=2624517 or http://dx.doi.org/10.2139/ssrn.2624517

Martin Nielsen (Contact Author)

University of Southern Denmark - Department of Business and Economics ( email )

DK-5230 Odense
Denmark

HOME PAGE: http://martinecon.com

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