Another Tale of Two-Sided markets

Hans Jarle Kind and Frank Staehler ()
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Frank Staehler: Department of Economics, University of Otago
Authors registered in the RePEc Author Service: Frank Stähler

No 708, Working Papers from University of Otago, Department of Economics

Abstract: This note generalizes the frequently used Hotelling model for two-sided markets. We demonstrate an invariance theorem: advertisement levels neither depend on the media price nor on the location of the media firm. An increase in advertising revenues does not change location but only the media price. In conclusion, a Hotelling model of two-sided markets is equivalent to one of one-sided markets.

Keywords: Hotelling; general density function; media; location (search for similar items in EconPapers)
JEL-codes: D43 L82 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2007-06, Revised 2007-06
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