Network Quality in the Early Telegraph Industry

Abstract

During the early development of the telegraph industry, the network consisted of many interconnected firms that were often local monopolists. This market structure gave firms an incentive to supply a lower quality of service and charge a higher price than an integrated monopolist. Telegraph entrepreneurs attempted to contract with each other in order to provide better quality service throughout the network. However, the high costs of monitoring and enforcing these agreements made them untenable and ultimately contributed to the integration of the industry.

Citation

Nonnenmacher, T. (2006), "Network Quality in the Early Telegraph Industry", Field, A.J., Clark, G. and Sundstrom, W.A. (Ed.) Research in Economic History (Research in Economic History, Vol. 23), Emerald Group Publishing Limited, Leeds, pp. 61-82. https://doi.org/10.1016/S0363-3268(05)23002-1