(Tuesday, 3rd May 2005)
This course will examine how demand-side externalities and dynamic competition can affect the economics of regulating network industries. After briefly reviewing the economics of network externalities and of innovation-based competition, this course will discuss the tradeoffs that arise when intervening to promote competition in a network industry. We will discuss horizontal relationships among physical networks, as well as vertical relationships between networks and applications providers, and we will analyze the welfare issues that arise in deciding whether to mandate access, interconnection, and interoperability in network markets. The course will then examine the issue of “Internet neutrality” and examine the regulatory tradeoffs that might arise in deciding whether or not to mandate various kinds of interconnection among providers of Internet content/applications and the networks that link consumers to such content and applications.
Bibliographical references :
Must read reference : Joe Farrell and Paul Klemperer (2004) Coordination and Lock-In: Competition with Switching Costs and Network Effects Section I (Contents, Introduction and Abstract) Preliminary draft chapter for Handbook of Industrial Organization, Vol 3.
Joe Farrell and Paul Klemperer (2004) Coordination and Lock-In: Competition with Switching Costs and Network Effects Section III (Network Effects) Preliminary draft chapter for Handbook of Industrial Organization, Vol 3.
Christiaan Hogendorn (2005), Regulating Vertical Integration in Broadband: Open Access versus Common Carriage, Review of Network Economics, 4(1), 2005.
Mark A. Lemley and Lawrence Lessig (2000), "The End of End-to-End: Preserving the Architecture of the Internet in the Broadband Era", U.C. Berkeley Public Law and Legal Theory, Research Paper No. 36.