Monopoly Quality Degradation and Regulation in Cable Television

Crawford, Gregory S.; Shum, Matthew

doi:10.2139/ssrn.829288

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Monopoly Quality Degradation and Regulation in Cable Television

47 Pages Posted: 20 Oct 2005

See all articles by Gregory S. Crawford

Gregory S. Crawford

University of Zurich - Department of Economics

Matthew Shum

Johns Hopkins University - Department of Economics

Date Written: September 30, 2005

Abstract

Using an empirical framework based on the Mussa-Rosen model of monopoly quality choice, we calculate the degree of quality degradation in cable television markets and the impact of regulation on those choices. We find lower bounds of quality degradation ranging from 11 to 45% of offered service qualities. Furthermore, cable operators in markets with local regulatory oversight offer significantly higher quality, less degradation, and greater quality per dollar, despite higher prices.

Keywords: monopoly, quality, regulation, cable television

JEL Classification: L12, L50, L96, L43, D42

Suggested Citation: Suggested Citation

Crawford, Gregory S. and Shum, Matthew, Monopoly Quality Degradation and Regulation in Cable Television (September 30, 2005). Available at SSRN: https://ssrn.com/abstract=829288 or http://dx.doi.org/10.2139/ssrn.829288