NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Economic Experiments and Neutrality in Internet Access

Shane Greenstein

NBER Working Paper No. 13158
Issued in June 2007
NBER Program(s):Productivity, Innovation, and Entrepreneurship

Economic experiments yield lessons to firms that can be acquired only through market experience. Economic experiments cannot take place in a laboratory; scientists, engineers, or marketing executives cannot distill equivalent lessons from simply building a prototype or interviewing potential customers and vendors. The historical record illustrates that economic experiments were important for value creation in Internet access markets. In general, industry-wide returns from economic experiments exceed private returns, with several important exceptions. Those conclusions motivate an inquiry into whether regulatory policy can play a role in fostering the creation of value. The net neutrality debate is reinterpreted through this lens. A three part test is proposed for encouraging economic experiments from both broadband carriers and providers of complementary services.

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Document Object Identifier (DOI): 10.3386/w13158

Published: Economic Experiments and Neutrality in Internet Access, Shane Greenstein. in Innovation Policy and the Economy, Volume 8, Jaffe, Lerner, and Stern. 2007

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