Hoernig, SteffenMonteiro, Francisco2020-02-142022-02-262020-01-010165-1765PURE: 15389204PURE UUID: 997a7ff1-964b-4d71-b446-1533569e9d11Scopus: 85074425083ORCID: /0000-0003-1461-0048/work/64704483WOS: 000509616300017http://hdl.handle.net/10362/92736We consider internet service providers’ incentives to zero-rate, i.e. to not count the usage of certain services towards data allowances, in the absence of payments from content providers. We show that zero-rating is adopted if and only if it strongly increases subscriptions. For this it is necessary that participation (as opposed to usage) network effects are strong enough and if zero-rating offers raise expectations about other subscribers’ usage. Zero-rating then also maximizes total welfare.151811engNet neutralityNetwork effectsZero-ratingFinanceEconomics and Econometricsjournal article10.1016/j.econlet.2019.108813https://www.scopus.com/pages/publications/85074425083