Profit-shifting in Two-sided Markets
Dirk Schindler () and
Guttorm Schjelderup ()
No 2009/1, Discussion Papers from Norwegian School of Economics, Department of Business and Management Science
We investigate how multinational two-sided platform firms set their prices on intra firm transactions. Two-sided platform firms derive income from two customer groups that are connected through at least one positive network externality from one group to the other. A main finding is that even in the absence of taxation transfer prices deviate from marginal cost of production. A second result of the paper is that it is inherently difficult to establish arm's length prices in two-sided markets. Finally, we find that differences in national tax rates may be welfare enhancing despite the use of such prices as a profit shifting device.
Keywords: Multinational enterprises; two-sided markets; profit shifting (search for similar items in EconPapers)
JEL-codes: D21 L24 (search for similar items in EconPapers)
Pages: 13 pages
New Economics Papers: this item is included in nep-bec, nep-mic, nep-mkt and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
Journal Article: Profit Shifting in Two-Sided Markets (2010)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:hhs:nhhfms:2009_001
Access Statistics for this paper
More papers in Discussion Papers from Norwegian School of Economics, Department of Business and Management Science NHH, Department of Business and Management Science, Helleveien 30, N-5045 Bergen, Norway. Contact information at EDIRC.
Bibliographic data for series maintained by Stein Fossen ().