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Monopoly Quality Degradation and Regulation in Cable Television

Gregory S. Crawford and Matthew Shum
The Journal of Law & Economics
Vol. 50, No. 1 (February 2007), pp. 181-219
DOI: 10.1086/508310
Stable URL: http://www.jstor.org/stable/10.1086/508310
Page Count: 39
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Since scans are not currently available to screen readers, please contact JSTOR User Support for access. We'll provide a PDF copy for your screen reader.
Monopoly Quality Degradation and Regulation in Cable Television
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Abstract

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.

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