Tuesday, May 06, 2014 1:21pm

Net Neutrality II

Considering both distributional effects and changes in efficiency, it is a good idea to let companies that send video or other content to consumers pay more to Internet service providers for the right to send that traffic using faster or higher quality service.

Responses
 

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel

Responses weighted by each expert's confidence

Source: IGM Economic Experts Panel
www.igmchicago.org/igm-economic-experts-panel
Participant University Vote Confidence Comment Bio/Vote History
Acemoglu Daron Acemoglu MIT Uncertain 4
Bio/Vote History
         
Alesina Alberto Alesina Harvard Agree 2
Bio/Vote History
         
Altonji Joseph Altonji Yale Agree 6
High bandwidth traffic imposes externalities on other users.
Bio/Vote History
         
Auerbach Alan Auerbach Berkeley Agree 3
Bio/Vote History
         
Autor David Autor MIT Agree 7
Net neutrality is a fiction. Hire Akamai (et al.) to mirror your servers worldwide to speed content to your users. One user: Healthcare.gov!
-see background information here
Bio/Vote History
         
Baicker Katherine Baicker Harvard Agree 2
Bio/Vote History
         
Banerjee Abhijit Banerjee MIT Uncertain 1
I worry it will crowd out the public goods that make the internet uniquely valuable unless bandwidth gets so cheap that it doesn't matter.
Bio/Vote History
         
Bertrand Marianne Bertrand Chicago Disagree 4
Bio/Vote History
         
Brunnermeier Markus Brunnermeier Princeton No Opinion
This might lead to better allocation but also opens the room for price discrimination. The implications for the consumers are not obvious.
Bio/Vote History
         
Chetty Raj Chetty Harvard Agree 5
Bio/Vote History
         
Chevalier Judith Chevalier Yale Uncertain 10
Regs have to address vertical price squeeze motivated price discrimination.
Bio/Vote History
         
Currie Janet Currie Princeton Disagree 5
The broadband industry does not seem to be very competitive, so allowing it to charge more to content providers may not improve the market.
Bio/Vote History
         
Cutler David Cutler Harvard Uncertain 4
Bio/Vote History
         
Deaton Angus Deaton Princeton Agree 7
Bio/Vote History
         
Duffie Darrell Duffie Stanford Strongly Agree 9
If all qualities sell at the same price, markets cannot allocate quality efficiently. Works for soap, wine, and haircuts; why not Internet?
Bio/Vote History
         
Edlin Aaron Edlin Berkeley Uncertain 1
Faster service is valuable and this is one way we may get it but adverse effects are also possible.
Bio/Vote History
         
Eichengreen Barry Eichengreen Berkeley Uncertain 5
Bio/Vote History
         
Einav Liran Einav Stanford Disagree 9
Bio/Vote History
         
Fair Ray Fair Yale Uncertain 5
Bio/Vote History
         
Finkelstein Amy Finkelstein MIT Agree 4
Bio/Vote History
         
Goldberg Pinelopi Goldberg Yale Agree 6
Bio/Vote History
         
Goolsbee Austan Goolsbee Chicago Uncertain 8
did any else notice how slippery this hill we are camping on seems?
Bio/Vote History
         
Greenstone Michael Greenstone Chicago Uncertain 7
there is an obvious potential efficiency gain but there is also potential for a harmful "vertical price squeeze". net effect is unclear.
Bio/Vote History
         
Hall Robert Hall Stanford Uncertain 7
This is a total side issue. The central issue is the perennial last-mile problem--the market power of the cable and phone companies.
Bio/Vote History
         
Hart Oliver Hart Harvard Uncertain 6
Letting price vary with quality is good if there is enough competition. I don't know if that's true here. If not the answer is less clear.
Bio/Vote History
         
Holmström Bengt Holmström MIT Agree 6
Bio/Vote History
         
Hoxby Caroline Hoxby Stanford Strongly Agree 10
Answer obvious on efficiency grounds. On distribution, use other means to redistribute to poor--not covert internet cross subsidization.
Bio/Vote History
         
Hoynes Hilary Hoynes Berkeley Uncertain 7
Clear gain to providing faster service at higher costs. Uncertain comes from potential GE effects in reducing access for those unable to pay
Bio/Vote History
         
Judd Kenneth Judd Stanford Agree 8
Bio/Vote History
         
Kaplan Steven Kaplan Chicago Uncertain 9
Bio/Vote History
         
Kashyap Anil Kashyap Chicago Uncertain 3
Presumably creates strong incentives for vertical integration. Not clear if that is good or not.
Bio/Vote History
         
Klenow Pete Klenow Stanford Agree 1 Bio/Vote History
         
Levin Jonathan Levin Stanford Did Not Answer
Bio/Vote History
         
Maskin Eric Maskin Harvard No Opinion
Bio/Vote History
         
Nordhaus William Nordhaus Yale Agree 5
Bio/Vote History
         
Obstfeld Maurice Obstfeld Berkeley Uncertain 3
Bio/Vote History
         
Saez Emmanuel Saez Berkeley Agree 2
Bio/Vote History
         
Samuelson Larry Samuelson Yale Disagree 5
This would be a great idea if the market for service provision was competitive, but is less obvious with our current market.
Bio/Vote History
         
Scheinkman José Scheinkman Princeton Uncertain 5
In the absence of robust competition in broadband, regulation is needed to help new applications, services and content.
Bio/Vote History
         
Schmalensee Richard Schmalensee MIT Agree 3
It is not generally good policy to restrict firms' product offerings, but there seem to be other considerations.
Bio/Vote History
         
Shapiro Carl Shapiro Berkeley Did Not Answer
Bio/Vote History
         
Shimer Robert Shimer Chicago Agree 3
Clearly winners and losers from this policy and clearly the market is imperfect. This is a hard call
Bio/Vote History
         
Stokey Nancy Stokey Chicago Agree 5
Bio/Vote History
         
Thaler Richard Thaler Chicago Agree 1
Seems like those who cause congestion should pay more. I know some worry that ISPs will play favorites, but that should be preventable.
Bio/Vote History
         
Udry Christopher Udry Yale Disagree 6
Net neutrality has worked well, and likely maximizes welfare in the short-run. Longer-term investment incentives are the counter-argument.
-see background information here
Bio/Vote History
         

10 New Economic Experts join the IGM Panel


For the past two years, our expert panelists have been informing the public about the extent to which economists agree or disagree on important public policy issues. This week, we are delighted to announce that we are expanding the IGM Economic Experts Panel to add ten new distinguished economists. Like our other experts, these new panelists have impeccable qualifications to speak on public policy matters, and their names will be familiar to other economists and the media.

To give the public a broad sense of their views on policy issues, each new expert has responded to a selection of 16 statements that our panel had previously addressed. We chose these 16 statements, which cover a wide range of important policy areas, because the original panelists' responses to them were analyzed in a paper comparing the views of our economic experts with those of the American public. You can find that paper, by Paola Sapienza and Luigi Zingales, here. The paper, along with other analyses of the experts' views, was discussed during the American Economic Association annual meetings, and the video can be found here.

The new panelists' responses to these statements can be seen on their individual voting history pages. Our ten new economic experts are:

Abhijit Banerjee (MIT)
Markus K. Brunnermeier (Princeton)
Liran Einav (Stanford)
Amy Finkelstein (MIT)
Oliver Hart (Harvard)
Hilary Hoynes (Berkeley)
Steven N. Kaplan (Chicago)
Larry Samuelson (Yale)
Carl Shapiro (Berkeley)
Robert Shimer (Chicago)


Please note that, for the 16 previous topics on which these new panelists have voted, we left the charts showing the distribution of responses unchanged. Those charts reflect the responses that our original panelists gave at the time, and we have not altered them to reflect the views of the new experts.

We have also taken this opportunity to ask our original panelists whether they would vote differently on any of the statements we have asked about in the past. Several experts chose to highlight statements to which they would currently respond differently. In such cases, you will see this "revote" below the panelist's original vote. We think you will enjoy seeing examples of statements on which some experts have reconsidered.

As with the 16 previous statements voted on by new panelists, these "revote" responses are not reflected in the chart that we display showing the distribution of views for that topic: all the charts for previous questions reflect the distribution of views that the experts expressed when the statement was originally posed.

About the IGM Economic Experts Panel

This panel explores the extent to which economists agree or disagree on major public policy issues. To assess such beliefs we assembled this panel of expert economists. Statistics teaches that a sample of (say) 40 opinions will be adequate to reflect a broader population if the sample is representative of that population.

To that end, our panel was chosen to include distinguished experts with a keen interest in public policy from the major areas of economics, to be geographically diverse, and to include Democrats, Republicans and Independents as well as older and younger scholars. The panel members are all senior faculty at the most elite research universities in the United States. The panel includes Nobel Laureates, John Bates Clark Medalists, fellows of the Econometric society, past Presidents of both the American Economics Association and American Finance Association, past Democratic and Republican members of the President's Council of Economics, and past and current editors of the leading journals in the profession. This selection process has the advantage of not only providing a set of panelists whose names will be familiar to other economists and the media, but also delivers a group with impeccable qualifications to speak on public policy matters.

Finally, it is important to explain one aspect of our voting process. In some instances a panelist may neither agree nor disagree with a statement, and there can be two very different reasons for this. One case occurs when an economist is an expert on a topic and yet sees the evidence on the exact claim at hand as ambiguous. In such cases our panelists vote "uncertain". A second case relates to statements on topics so far removed from the economist's expertise that he or she feels unqualified to vote. In this case, our panelists vote "no opinion".

The Economic Experts Panel questions are emailed individually to the members of the panel, and each responds electronically at his or her convenience. Panelists may consult whatever resources they like before answering.

Members of the public are free to suggest questions (see link below), and the panelists suggest many themselves. Members of the IGM faculty are responsible for deciding the final version of each week’s question. We usually send a draft of the question to the panel in advance, and invite them to point out problems with the wording if they see any. In response, we typically receive a handful of suggested clarifications from individual experts. This process helps us to spot inconsistencies, and to reduce vagueness or problems of interpretation.

The panel data are copyrighted by the Initiative on Global Markets and are being analyzed for an article to appear in a leading peer-reviewed journal.

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