Inter-Firm Price Coordination in a Two-Sided Market

Hans Jarle Kind, Tore Nilssen () and Lars Sørgard

No 16/2014, Discussion Paper Series in Economics from Norwegian School of Economics, Department of Economics

Abstract: In many two-sided markets we observe that there is a common distributor on one side of the market. One example is the TV industry, where TV channels choose advertising prices to maximize own profi…t and typically delegate determination of viewer prices to independent distributors. We show that in such a market structure the stronger the competition between the TV channels, the greater will joint profits in the TV industry be. We also show that joint pro…ts might be higher if the wholesale contract between each TV channel and the distributor consists of a simple fixed fee rather than a two-part tariff.

Keywords: Vertical relations; advertising; media economics. (search for similar items in EconPapers)
JEL-codes: L11 L82 M31 M37 (search for similar items in EconPapers)
Pages: 19 pages
Date: 2014-05-22
New Economics Papers: this item is included in nep-com, nep-mic and nep-net
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Citations: View citations in EconPapers (1)

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Journal Article: Inter-firm price coordination in a two-sided market (2016)
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