I'm currently writing my Bachelor Thesis which discusses the Question:

Does Facebook's free Basics Programm (A website which lets people in poor countries access Internet Services without paying anything) enhances the economic welfare?

It is about zero rating content, which means that similar to t-mobiles "binge on" several services don't count against the data cap. Since I have no experience and no in-depth knowledge of microeconomics, I do not really know how to build this model. I have several aspects that should be included:

  1. We have 2 Content providers, one is this free basic program from Facebook, another one the regular Internet Service Provider like T-Mobile.
  2. We have 2 consumer groups, one with low income which can only afford the free basic program, and a high income group which can afford the tmobile service
  3. There has to be saturation in the consumers utility, so that they use Internet with a decreasing marginal utility

My questions are, how would you start a model like this? More Specifically, what should I calculate to come to a conclusion? How would you describe the two utility functions with respect of the saturation aspect?

If my question seems unclear, feel free to comment and I will try to specify my problem.

  • $\begingroup$ Welcome to Econ.SE! I edited your question for clarity. Please feel free to re-edit in case you are not satisfied. Notice that "Thank you" comments are not necessary. No one will interpret that as rudeness. $\endgroup$
    – luchonacho
    Aug 25 '17 at 12:09
  • $\begingroup$ I think you should probably chose a topic that you can model in a way you are more familiar with. $\endgroup$
    – Giskard
    Aug 25 '17 at 12:35
  • $\begingroup$ Unfortunately I can not change the topic and have to deal with it. I also do not need anything to complex, just some basics. E.g how should users utility functions look like or how to derive consumer welfare. $\endgroup$
    – Carlos
    Aug 25 '17 at 12:41

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service, privacy policy and cookie policy

Browse other questions tagged or ask your own question.