Working Paper: NBER ID: w22040
Authors: Joshua S. Gans; Michael L. Katz
Abstract: We correct and extend the results of Gans (2015) regarding the effects of net neutrality regulation on equilibrium outcomes in settings where a content provider sells its services to consumers for a fee. We examine both pricing and investment effects. We extend the earlier paper’s result that weak forms of net neutrality are ineffective and also show that even a strong form of net neutrality may be ineffective. In addition, we demonstrate that, when strong net neutrality does affect the equilibrium outcome, it may harm efficiency by distorting both ISP and content provider investment and service-quality choices.
Keywords: net neutrality; ISP pricing; content provider incentives; regulation
JEL Codes: D4; D42; D43; L1; L12; L13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| weak forms of net neutrality (L96) | ISP pricing strategies (D49) |
| strong net neutrality (L96) | inefficiencies (D61) |
| strong net neutrality (L96) | negative effects on total surplus (D62) |