학술논문
THE EFFECTS OF COMPETITION ON THE PRICE FOR CABLE MODEM INTERNET ACCESS.
Document Type
Article
Author
Source
Subject
*Economic competition
*Internet service providers
*Broadband communication systems
*Pricing
*Consumer preferences
*Duopolies
*Monopolies
*Product differentiation
*Mathematical models
*Empirical research
Digital subscriber lines
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Language
ISSN
0034-6535
Abstract
Theory suggests that a firm facing competition will raise prices as consumer preferences become more diverse, and with high enough diversity, a duopolist under product differentiation may price higher than a monopolist. Focusing on the price for cable modem Internet access, with or without DSL competition, and using the standard deviation of education attainment as a proxy for preference diversity, we find empirical support for these results. In markets where cable competes with DSL, the cable Internet price increases with preference diversity. Moreover, the cable Internet price under DSL competition can exceed that without competition when preferences are sufficiently diverse. [ABSTRACT FROM AUTHOR]