Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/185772
Authors: 
Baake, Pio
Sudaric, Slobodan
Year of Publication: 
2018
Series/Report no.: 
Discussion Paper No. 102
Abstract: 
We analyze competition between Internet Service Providers (ISPs) where consumers demand heterogeneous content within two Quality-of-Service (QoS) regimes, Net Neutrality and Paid Prioritization, and show that paid prioritization increases the static efficiency compared to a neutral network. We also consider paid prioritization intermediated by Content Delivery Networks (CDNs). While the use of CDNs is welfare neutral, it results in higher consumer prices for internet access. Regarding incentives to invest in network capacity we show that discriminatory regimes lead to higher incentives than the neutral regime as long as capacity is scarce, while investment is highest in the presence of CDNs.
Subjects: 
content delivery network
investment
net neutrality
prioritization
JEL: 
L13
L51
L96
Document Type: 
Working Paper

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