Zero-rating and network effects

C-Tier
Journal: Economics Letters
Year: 2020
Volume: 186
Issue: C

Authors (2)

Hoernig, Steffen (Universidade Nova de Lisboa) Monteiro, Francisco (not in RePEc)

Score contribution per author:

0.503 = (α=2.01 / 2 authors) × 0.5x C-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We consider internet service providers’ incentives to zero-rate, i.e. to not count the usage of certain services towards data allowances, in the absence of payments from content providers. We show that zero-rating is adopted if and only if it strongly increases subscriptions. For this it is necessary that participation (as opposed to usage) network effects are strong enough and if zero-rating offers raise expectations about other subscribers’ usage. Zero-rating then also maximizes total welfare.

Technical Details

RePEc Handle
repec:eee:ecolet:v:186:y:2020:i:c:s0165176519304124
Journal Field
General
Author Count
2
Added to Database
2026-02-02