Marc Bourreau

Bio: Marc Bourreau is an academic researcher from Télécom ParisTech. The author has contributed to research in topics: Competition (economics) & Investment (macroeconomics). The author has an hindex of 27, co-authored 186 publications receiving 2621 citations. Previous affiliations of Marc Bourreau include Orange S.A. & École Normale Supérieure.

Net Neutrality with Competing Internet Platforms

Abstract: We propose a two-sided model with two competing Internet platforms, and a continuum of Content Providers (CPs). We study the effect of a net neutrality regulation on capacity investments in the market for Internet access, and on innovation in the market for content.Under the alternative discriminatory regime, platforms charge a priority fee to those CPs which are willing to deliver their content on a fast lane. We find that under discrimination investments in broadband capacity and content innovation are both higher than under net neutrality. Total welfare increases, though the discriminatory regime is not always beneficial to the platforms as it can intensify competition for subscribers. As platforms have a unilateral incentive to switch to the discriminatory regime, a prisoner’s dilemma can arise. We also consider the possibility of sabotage, and show that it can only emerge, with adverse welfare effects, under discrimination.

Regulation and innovation in the telecommunications industry

Abstract: This paper aims to introduce issues that relate regulation and innovation in the telecommunications industry. We try to address the following question: which types of regulatory schemes are likely to promote innovation in a fast-growing telecommunications industry? Section 2 analyses ex ante control by sector-specific regulation and ex post control by competition policies. Section 3 deals with the importance of compatibility hence regulation of standards in the telecommunications industry. Section 4 discusses the major issues pertaining to the relation between innovation and pricing on the one hand, and innovation and unbundling on the other. (This abstract was borrowed from another version of this item.)

Dynamic Entry and Investment in New Infrastructures: Empirical Evidence from the Fixed Broadband Industry

Abstract: In the telecommunications industry, the ladder-of-investment approach claims that service-based competition (when entrants lease access to incumbents’ facilities) can serve as a “stepping stone” for facility-based entry (when entrants build their own infrastructures to provide services). In this paper, we build an empirical model that encompasses a complete ladder-of-investment, composed of three rungs: bitstream access, local loop unbundling and new access facilities. Using data from the European Commission’s “Broadband access in the EU” reports covering 15 European member states for 17 semesters, we test the ladder-of-investment hypothesis. We find no empirical support for this hypothesis, that is, for the transition from local loop unbundling to new access infrastructures, and weak empirical support for the transition from bitstream access lines to local loop unbundling. These results are robust when we take into account the migration effect, the number of access rungs, the development of broadband cable, the regulatory performance, and the evolution of local loop unbundling prices. Copyright Springer Science+Business Media New York 2014 (This abstract was borrowed from another version of this item.)

Impact of Online Consumer Reviews on Sales: The Moderating Role of Product and Consumer Characteristics

Abstract: This article examines how product and consumer characteristics moderate the influence of online consumer reviews on product sales using data from the video game industry. The findings indicate that online reviews are more influential for less popular games and games whose players have greater Internet experience. The article shows differential impact of consumer reviews across products in the same product category and suggests that firms' online marketing strategies should be contingent on product and consumer characteristics. The authors discuss the implications of these results in light of the increased share of niche products in recent years.

The Economics of Two-Sided Markets

Abstract: At a local Best Buy, a child places a new Sony PlayStation 3 on the cashier’s counter while the parents dig out their Visa card. The gaming system and the payment card may appear to have little connection other than this purchase. However, these two items share an important characteristic that is generating a series of economic insights and has important implications for strategic decision making and economic policymaking. Both video game systems and payment cards are examples of two-sided markets. Broadly speaking, a two-sided market is one in which 1) two sets of agents interact through an intermediary or platform, and 2) the decisions of each set of agents affects the outcomes of the other set of agents, typically through an externality. In the case of a video game system, the intermediary is the console producer—Sony in the scenario above—while the two sets of agents are consumers and video game developers. Neither consumers nor game developers will be interested in the PlayStation if the other party is not. Similarly, a successful payment card requires both consumer usage and merchant acceptance, where both consumers and merchants value each others’ participation. Many more products fit into this paradigm, such as search engines, newspapers, and almost any advertisersupported media (examples in which consumers often negatively value, rather than positively value, the participation of the other side), as well as most software or title-based operating systems and consumer electronics. Malls which seek retailers and consumers, convention organizers which seek buyers and sellers, dating services which seek men and women, and The Journal of Economic Perspectives which seeks content and readership, all experience the economics of two-sided markets. The multi-sided nature of many Internet and high-technology markets, as well as