It may be that the public at large benefits from having more users connected, so that it would be efficient to provide a connection subsidy to ensure that some users who would not otherwise connect do so. This does not mean that when there are network externalities all connections should be free, but that it would be efficient to have some subsidy per connection that is related to the public gain from and additional connection. Theoretically, an even more efficient scheme would target those users who are most likely to abstain without a subsidy, but targeted subsidies are difficult to implement.
Predictor: MacKie-Mason, Jeffrey K.
Prediction, in context:The 1995 book “Public Access to the Internet,” edited by Brian Kahin and James Keller carries the chapter, “Pricing the Internet” by Jeffrey K. MacKie-Mason and Hal R. Varian. MacKie is an associate professor of economics and Varian is a professor of economics at the University of Michigan. They write: ”It may be that the public at large benefits from having more users connected, so that it would be efficient to provide a connection subsidy to ensure that some users who would not otherwise connect do so. This does not mean that when there are network externalities all connections should be free, but that it would be efficient to have some subsidy per connection that is related to the public gain from and additional connection. Theoretically, an even more efficient scheme would target those users who are most likely to abstain without a subsidy, but targeted subsidies are difficult to implement.”
Date of prediction: January 1, 1995
Topic of prediction: Information Infrastructure
Subtopic: Cost/Pricing
Name of publication: Public Access to the Internet (book)
Title, headline, chapter name: Pricing the Internet
Quote Type: Direct quote
Page number or URL of document at time of study:
Page 291
This data was logged into the Elon/Pew Predictions Database by: Guarino, Jennifer Anne