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Does Public Competition Crowd Out Private Investment? Evidence from Municipal Provision of Internet Access

Kyle Wilson

American Economic Journal: Microeconomics2025https://doi.org/10.1257/mic.20210110article
AJG 3ABDC A*
Weight
0.51

Abstract

Government infrastructure investment may crowd out investment from private firms or induce them to invest preemptively. The tension between these effects underlies the policy debate over municipal provision of internet access. I estimate demand for broadband and combine these results with a dynamic oligopoly model of private and public firms' entry and investment decisions. I simulate a ban on public entry and find that municipalities crowd out more private fiber-optic investment than they induce through preemption. I estimate that this ban decreases consumer surplus and municipal profits by $27 billion while increasing private profits by $23 billion over ten years. (JEL D22, G31, H44, H57, L33, L96)

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https://doi.org/https://doi.org/10.1257/mic.20210110

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@article{kyle2025,
  title        = {{Does Public Competition Crowd Out Private Investment? Evidence from Municipal Provision of Internet Access}},
  author       = {Kyle Wilson},
  journal      = {American Economic Journal: Microeconomics},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1257/mic.20210110},
}

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Does Public Competition Crowd Out Private Investment? Evidence from Municipal Provision of Internet Access

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Evidence weight

0.51

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.52 × 0.4 = 0.21
M · momentum0.50 × 0.15 = 0.07
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.