Optimal Divisionalization for Selling Networks of Cable Television Services
AbstractIn 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.
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Bibliographic InfoPaper provided by EconWPA in its series Industrial Organization with number 0403004.
Length: 17 pages
Date of creation: 09 Mar 2004
Date of revision:
Note: Type of Document - pdf; pages: 17
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Cable Television; Divisionalization; Franchising.;
Find related papers by JEL classification:
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2004-03-14 (All new papers)
- NEP-COM-2004-03-14 (Industrial Competition)
- NEP-NET-2004-04-11 (Network Economics)
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