Net Neutrality: Markets and Strategic Interactions of the Internet
http://www.forbes.com/sites/timworstall/2014/09/10/internet-slowdown-day-the-game-theory-of-net-neutrality
“Internet Slowdown Day; Theory of Net Neutrality” describes the Internet as a highway network of traffic with the players of the network rushing to a near endless possibility of outcomes. Consequently, net neutrality means that all Internet packets must be treated equally even though some companies require a greater amount of bandwidth and speed in order to run properly. Politicians have recently been discussing possible changes over net neutrality. If net neutrality is to be abandoned, network providers could charge the companies that require high speed to pay more money.
This relates directly to what we are learning about markets and strategic interactions on networks. The interactions among participants in a market can naturally be viewed as a phenomenon that takes place in the network. In this article, the market is Internet speed. The network highways are the fibre owners that if net neutrality were to be abandoned would be able to regulate traffic by making higher bandwidth users pay more to maintain their services. This is a great example of when an individual’s position in the network structure can translate into economic outcomes.
The author of “Internet Slowdown Day; Theory of Net Neutrality” claims that abandoning net neutrality is simply the logical thing to do. The property of Market-Clearing Prices strengthens the author’s claim. If each buyer has a bandwidth and speed that it requires, each buyer ends up with different speeds: somehow the prices have perfectly resolved the network traffic that would arise if every bandwidth user were to be treated equally. Perhaps abandoning net neutrality can significantly diminish the amount of traffic that is experienced on the Internet if price discrimination resulted in a preferred-seller graph that has a perfect matching between speed and price that a bandwidth user is willing to pay for that speed.