Usage-Based Pricing and Demand for Residential Broadband

作者：Nevo Aviv; Turner John L; Williams Jonathan W

来源：Econometrica, 2016, 84(2): 411-443.

DOI：10.3982/ECTA11927

• Demand
• broadband
• dynamics
• usage-based pricing

We estimate demand for residential broadband using high-frequency data from subscribers facing a three-part tariff. The three-part tariff makes data usage during the billing cycle a dynamic problem, thus generating variation in the (shadow) price of usage. We provide evidence that subscribers respond to this variation, and we use their dynamic decisions to estimate a flexible distribution of willingness to pay for different plan characteristics. Using the estimates, we simulate demand under alternative pricing and find that usage-based pricing eliminates low-value traffic. Furthermore, we show that the costs associated with investment in fiber-optic networks are likely recoverable in some markets, but that there is a large gap between social and private incentives to invest.

• 出版日期2016-3
• 单位西北大学