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Product quality and competition: evidence from the broadband industry

Author

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  • Markum Reed
  • Alison Watts

Abstract

Access to high-quality broadband internet is important in many different respects such as in communication, education, commerce and information acquisition. We investigate the relationship between the number of broadband providers in an area and the quality of broadband service provided where download speed is used as a proxy for quality. We find that increased competition in an area positively affects the access to fast download speeds. This finding is robust to three different top download speeds tested. Additionally, a theoretical model is provided which shows that competition can decrease the profits associated with offering slow speeds; this gives an incentive for providers to offer higher speeds as a way to increase profits.

Suggested Citation

  • Markum Reed & Alison Watts, 2018. "Product quality and competition: evidence from the broadband industry," Applied Economics, Taylor & Francis Journals, vol. 50(24), pages 2719-2732, May.
    • Handle: RePEc:taf:applec:v:50:y:2018:i:24:p:2719-2732
    DOI: 10.1080/00036846.2017.1406657
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    Cited by:

    1. Prieger, James, 2023. "Local banking markets and barriers to entrepreneurship in minority and other areas: Does broadband availability help?," MPRA Paper 118102, University Library of Munich, Germany.
    2. Prieger, James E., 2023. "Local banking markets and barriers to entrepreneurship in minority and other areas," Journal of Economics and Business, Elsevier, vol. 124(C).
    3. Mohammadi, Mohammad Ali, 2021. "Estimating Possible Subsidy Effects in Broadband Services and Deployment," MPRA Paper 111962, University Library of Munich, Germany.
    4. Mack, Elizabeth A. & Helderop, Edward & Keene, Thomas & Loveridge, Scott & Mann, John & Grubesic, Tony H. & Kowalkowski, Brian & Gollnow, Miranda, 2022. "A longitudinal analysis of broadband provision in tribal areas," Telecommunications Policy, Elsevier, vol. 46(5).
    5. Han, Luyi & Wojan, Timothy R. & Goetz, Stephan J., 2023. "Experimenting in the cloud: The digital divide's impact on innovation," Telecommunications Policy, Elsevier, vol. 47(7).

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