The role of switching hubs in global internet traffic

Chang Ho Yoon, Young Woong Song, Byoung Heon Jun

Research output: Contribution to journalArticlepeer-review


In the recent decade, global backbone providers have emerged to link dispersed networks. Local networks obtain global connectivity through transit contracts with switching hubs. Using the Shapley value, this paper shows that the bargaining position of the local network depends upon the quality-adjusted volume of net traffic, and that the rent to the hub depends on the volume of traffic between local networks. When there are two competing switching hubs, the larger hub can appropriate most of the rent. Anticipating this, the hubs tend to expand their capacity to preempt the market, as in the prisoners' dilemma.

Original languageEnglish
Pages (from-to)557
Number of pages1
JournalJournal of Institutional and Theoretical Economics
Issue number4
Publication statusPublished - 2005 Dec

ASJC Scopus subject areas

  • Economics and Econometrics


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