Optimal Divisionalization for Selling Networks of Cable Television Services
João Leitão ()
Industrial Organization from EconWPA
In this article, a condition for the optimal division’s number is calculated, for a market with two cable operators who offer a network service. The rationale for justifying the partial covering of the national market from the cable operators is presented. Furthermore, a problem of moral hazard is revealed, which is able to appear through the implementation of franchising schemes with independent divisions. This is particularly interesting because it can be applied to several industries such as Cable Television and Entertainment, and other activities including Internet and Computer Games Centres, which offer Internet broadband access and network games.
Keywords: Cable Television; Divisionalization; Franchising. (search for similar items in EconPapers)
JEL-codes: L11 L20 (search for similar items in EconPapers)
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Note: Type of Document - pdf; pages: 17
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpio:0403004
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