The economics of product-line restrictions with an application to the network neutrality debate

@article{Hermalin2007TheEO,
  title={The economics of product-line restrictions with an application to the network neutrality debate},
  author={Benjamin E. Hermalin and Michael L. Katz},
  journal={Information Economics and Policy},
  year={2007},
  volume={19},
  pages={215-248}
}
We examine the welfare effects of product-line restrictions, such as those called for by some proponents of network neutrality regulation. We consider a platform that brings together households and application providers. We find that restricting a monopoly platform to a single product has the following effects: (a) application providers that would otherwise have purchased a lowquality variant are excluded from the market; (b) applications “in the middle” of the market utilize a higher and more… CONTINUE READING