In this article, a condition for the optimal division’s number is presented, for a market with two cable operators who offer a network service. First, a reason is presented to justify a partial covering of the national market from the cable operators. Second, a problem of moral hazard is revealed, which is able to appear through the implementation of franchising schemes with independent divisions.
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Length: 25 pages Date of creation: 30 Mar 2003 Date of revision:
17 Apr 2003 Handle: RePEc:wpa:wuwpio:0303013
Note: Type of Document - Tex/WordPerfect/Handwritten; prepared on IBM PC - PC-TEX/UNIX Sparc TeX; to print on HP/PostScript/Franciscan monk; pages: 25 ; figures: included/request from author/draw your own Contact details of provider: Web page: http://129.3.20.41
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