nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2015‒03‒05
two papers chosen by
Walter Frisch
Universität Wien

  1. Online social networks and trust By Sabatini, Fabio; Sarracino, Francesco
  2. Net neutrality and inflation of traffic By Peitz, Martin; Schuett, Florian

  1. By: Sabatini, Fabio; Sarracino, Francesco
    Abstract: We explore how participation in social networking sites (SNS) such as Facebook and Twitter affects the most economically relevant aspect of social capital, trust. We use measures of trust in strangers (or social trust), trust in neighbours and trust in the police. We address endogeneity in the use of SNS by exploiting the variation in the availability of broadband for high-speed Internet, which relates to technological characteristics of the pre-existing voice telecommunication infrastructures. We find that all the proxies of trust significantly decrease with participation in online networks. We discuss several interpretations of the results in light of the specific features of Internet-mediated social interaction.
    Keywords: Internet; broadband; online networks; social networking sites; Facebook; trust; social capital; hate speech
    JEL: D89 O33 Z1 Z13 Z19
    Date: 2015–03–01
  2. By: Peitz, Martin; Schuett, Florian
    Abstract: Under strict net neutrality Internet service providers (ISPs) are required to carry data without any differentiation and at no cost to the content provider. We provide a simple framework with a monopoly ISP to evaluate different net neutrality rules. Content differs in its sensitivity to delay. Content providers can use congestion control techniques to reduce delay for their content, but do not take into account the effect of their decisions on the aggregate volume of traffic. As a result, strict net neutrality often leads to socially inefficient traffic in ation. We show that piece-meal departures from net neutrality, such as transmission fees or prioritization based on sensitivity to delay, do not necessarily improve efficiency. However, allowing the ISP to introduce bandwidth tiering and charge for prioritized delivery can implement the efficient allocation.
    Keywords: Net neutrality , network congestion , telecommunications , quality of service
    JEL: L12 L51 L86
    Date: 2015

This nep-ict issue is ©2015 by Walter Frisch. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.