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Bundling Demand in K-12 Broadband Procurement

Author

Listed:
  • Gaurab Aryal
  • Charles Murry
  • Pallavi Pal
  • Arnab Palit

Abstract

We evaluate the effects of bundling demand for broadband internet by K-12 schools. In 2014, New Jersey switched from decentralized procurements to a new procurement system that bundled schools into four regional groups. Using an event study approach, we find that, on average, prices for participants decreased by one-third, and broadband speed purchased increased sixfold. We bound the change in school expenditures due to the program and find that participants saved at least as much as their total “E-rate” subsidy from the federal government. Under weak assumptions on demand, we show that participating schools experienced large welfare gains.

Suggested Citation

  • Gaurab Aryal & Charles Murry & Pallavi Pal & Arnab Palit, 2024. "Bundling Demand in K-12 Broadband Procurement," CESifo Working Paper Series 11035, CESifo.
    • Handle: RePEc:ces:ceswps:_11035
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    References listed on IDEAS

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    1. Milgrom,Paul, 2004. "Putting Auction Theory to Work," Cambridge Books, Cambridge University Press, number 9780521536721, October.
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    More about this item

    Keywords

    broadband internet; exposure problem; bundling; welfare;
    All these keywords.

    JEL classification:

    • D44 - Microeconomics - - Market Structure, Pricing, and Design - - - Auctions
    • H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications

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