Net Neutrality, Pricing Instruments and Incentives

16 Pages Posted: 1 Mar 2016 Last revised: 23 Mar 2023

See all articles by Joshua S. Gans

Joshua S. Gans

University of Toronto - Rotman School of Management; NBER

Michael L. Katz

University of California, Berkeley - Department of Economics; Haas School of Business

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Date Written: February 2016

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.

Suggested Citation

Gans, Joshua S. and Katz, Michael L., Net Neutrality, Pricing Instruments and Incentives (February 2016). NBER Working Paper No. w22040, Available at SSRN: https://ssrn.com/abstract=2739565

Joshua S. Gans (Contact Author)

University of Toronto - Rotman School of Management ( email )

Canada

HOME PAGE: http://www.joshuagans.com

NBER ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Michael L. Katz

University of California, Berkeley - Department of Economics ( email )

579 Evans Hall
Berkeley, CA 94709
United States

Haas School of Business ( email )

Berkeley, CA 94720
United States

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