The Evolution of Price Discrimination in Transportation and its Implications for the Internet

Review of Network Economics, Vol. 3, No. 3, pp. 323-346, September 2004

24 Pages Posted: 28 Sep 2004 Last revised: 7 Feb 2013

See all articles by Andrew Odlyzko

Andrew Odlyzko

University of Minnesota - Twin Cities - School of Mathematics and Digital Technology Center

Abstract

A wide-ranging discussion of the evolution of pricing in early transportation industries, such as lighthouses, canals, and turnpikes, is presented. It shows that price discrimination was an important factor in the development of those industries, and tended to intensify with time. In order to make differential tariffs effective, service providers had the right of detailed inspection of the cargo. These historical precedents help explain the drive by large sectors of the telecommunications industry to gain greater control over what is transmitted over the Internet. The implications for the evolution of the Internet are briefly explored.

Keywords: Price Discrimination, Transportation, Internet, Telecommunications

JEL Classification: D40, D60, L11, L43, L50, L90, N70

Suggested Citation

Odlyzko, Andrew, The Evolution of Price Discrimination in Transportation and its Implications for the Internet. Review of Network Economics, Vol. 3, No. 3, pp. 323-346, September 2004, Available at SSRN: https://ssrn.com/abstract=596301

Andrew Odlyzko (Contact Author)

University of Minnesota - Twin Cities - School of Mathematics and Digital Technology Center ( email )

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HOME PAGE: http://www.dtc.umn.edu/~odlyzko

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