Public Policy in Network Industries

57 Pages Posted: 12 Oct 2006

See all articles by Nicholas Economides

Nicholas Economides

New York University - Leonard N. Stern School of Business - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: September 2006

Abstract

This paper discusses how antitrust law and regulatory rules should be applied to network industries. In assessing the application of antitrust in network industries, we analyze a number of relevant features of network industries and the way in which antitrust law and regulatory rules can affect them. These relevant features include (among others) network effects, market structure, market share and profits inequality, choice of technical standards, relationship between the number of active firms and social benefits, existence of market power, leveraging of market power in complementary markets, and innovation races. We find that there are often significant differences on the effects of application of antitrust law in network and non-network industries.

Keywords: networks, network effects, public policy, antitrust, telecommunications, technical standards, lock-in, net neutrality, Internet, Microsoft, Trinko

JEL Classification: L4, L5

Suggested Citation

Economides, Nicholas, Public Policy in Network Industries (September 2006). NYU, Law and Economics Research Paper No. 06-49, NET Institute Working Paper No. 06-01, NYU Working Paper No. EC-06-17, Available at SSRN: https://ssrn.com/abstract=936469 or http://dx.doi.org/10.2139/ssrn.936469

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