This paper examines the net neutrality debate in countries outside the U.S., particularly in the EU. Most appear to have endorsed the idea of net neutrality and believe that policies promoting unbundling mandatory network sharing will ensure neutral networks. We argue that unbundling may not...

An important issue in "network neutrality" is the degree to which networks that comprise the Internet may be "managed" by their operators. This paper examines the current costs of unmanaged/neutral network technology and demonstrates that as customer Internet usage patterns evolve and become...

We provide evidence that increasing consumer awareness may have been underlying the rise of debit card use. We find that consumers typically use multiple payment media and that this behavior is closely related to the use of debit cards besides cash. Moreover, it turns out that the use of...

Among the many crucial issues in infrastructure regulation has been how to handle network effects. These can both cause monopoly and complicate the management of partial transitions to competition in telecommunications and electricity. The recent global financial crisis itself reflects network...

This paper develops a new model, which allows for the co-existence of hub-and-spoke and point-to-point networks in the airline industry. Passengers are segmented between the non-stop and one-stop services. In the baseline model, the monopoly airlines ability to segment the market and effectively...

Time consistency refers to situations where a policy that is optimal ex ante proves not to be optimal ex post, creating the risk of opportunistic policy reversals. While the threat of such reversals has received widespread attention in the theoretical literature, testing whether policy is indeed...

This paper examines the pricing of a utility with an underdeveloped network facing a competitive fringe, short-run network adjustment costs, theft of service, and the threat of retaliatory government intervention that is increasing with the price it charges. Under a variety of plausible...

We investigate the entry of low-cost airlines (LCAs) in the German market. The strong competitive pressure of LCAs forced incumbent air and rail operators to reconsider their pricing strategy. Lufthansa reacted by a drastic cut of all prices for all intra-German origin and destinations (O&Ds)....

We present a price cap mechanism, which features an external standard, constructed to elicit efficient utility performance. We focus on a method for setting the external standard, which is usually based on industry total factor productivity (TFP), when 'peer' data are not readily available. The...

Rochet and Tirole have derived an elasticity rule for relative prices in two-sided markets. This rule is seen as counterintuitive because it seems to imply that the "more elastic side of the market" is charged more. In this note it is argued that this interpretation is based on the assumption...