【 The Digital Star Seminar Series No.16 】Differential Pricing for Internet Traffic: Theory and Evidence from a Chinese ISP

Date: 22 April 2022 (Fri) 
Time: 3:00pm - 4:30pm (Hong Kong Time, UTC+8)
Platform: Tencent Meeting (ID 886-704-265)

Host: Prof. Miaojun Wang (School of Economics, Zhejiang University)

Presenter: Ce Shi, The Chinese University of Hong Kong

Abstract：

Despite the growing importance of the digital economy, little is known about the welfare effect of differential pricing for Internet traffic. To investigate this question, we first analyze a model of monopoly differential pricing in a two-sided market, where an Internet service provider (ISP) charges both content providers for bandwidth and households for Internet service. We show new theoretical results that also guide our empirical analysis. Using a unique dataset on monthly transactions between a Chinese ISP and content providers, we estimate a model of the Internet market and quantify the welfare effects of differential pricing. Our counterfactual analysis shows that both consumer surplus and content provider surplus increase under differential pricing; however, the welfare gain is captured by a small number of big content providers, while other content providers become worse off.

Intro to the Presenter:

Ce Shi is an assistant professor of economics at the Chinese University of Hong Kong and a doctor of economics at the University of Virginia. His research focuses on Applied Microeconomics such as industrial organization theory and practice, digital economy and so on.

Organization：

- The Chinese University of Hong Kong-Zhejiang University Joint Research Center for Digital Economy

- China Digital Economy Research Center of School of Economics, Zhejiang University

- Zhejiang University Digital Economy Innovation Research Team

Intro to The Digital Star Seminar Series：

The Digital Star Seminar Series is co-hosted by the China Digital Economy Research Center of School of Economics, Zhejiang University, and the Chinese University of Hong Kong-Zhejiang University Joint Research Center for Digital Economy. This series of seminars will study the development of the digital economy and China's economic transformation based on the practice of China's digital transformation. We will invite domestic and overseas scholars to share and discuss the latest research on the digital economy and the Chinese economy. We hope that this academic platform can become a paradise for the study of the digital economy. More importantly, it can generate insights that significantly impact the digital economy and Chinese economy, which will help promote digital transformation and high-quality economic development in Chinese society.