Monopoly Quality Degradation and Regulation in Cable Television

Authors:
  • GCGregory S. Crawford
    Gregory S. Crawford
  • MSMatthew Shum
    Matthew Shum
Publisher website
Google Scholar
Abstract
Using an empirical framework based on the Mussa-Rosen model of monopoly quality choice, we calculate the degree of quality degradation in cable television markets and the impact of regulation on those choices. We find lower bounds of quality degradation ranging from 11 to 45 percent of offered service qualities. Furthermore, cable operators in markets with local regulatory oversight offer significantly higher quality, less degradation, and greater quality per dollar, despite higher prices.

This publication has 20 references indexed in Scilit: