Market Structures for Data Networks

Haim Mendelson
Graduate School of Business, Stanford University
(Joint work with Philipp Afeche)

Abstract

We examine the impact of market structure on price and capacity decisions in data communications networks in the presence of congestion effects, focussing on competition among providers who control subnetworks along a given route. We compare the cases of welfare maximization, monopoly, multiple independent profit-maximizing subnetworks and "edge pricing".