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Inter-Firm Price Coordination in a Two-Sided Market

Author

Listed:
  • Kind, Hans Jarle

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Nilssen, Tore

    (University of Oslo)

  • Sørgard, Lars

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

Abstract

In many two-sided markets we observe that there is a common distributor on one side of the market. One example is the TV industry, where TV channels choose advertising prices to maximize own profi…t and typically delegate determination of viewer prices to independent distributors. We show that in such a market structure the stronger the competition between the TV channels, the greater will joint profits in the TV industry be. We also show that joint pro…ts might be higher if the wholesale contract between each TV channel and the distributor consists of a simple fixed fee rather than a two-part tariff.

Suggested Citation

  • Kind, Hans Jarle & Nilssen, Tore & Sørgard, Lars, 2014. "Inter-Firm Price Coordination in a Two-Sided Market," Discussion Paper Series in Economics 16/2014, Norwegian School of Economics, Department of Economics.
    • Handle: RePEc:hhs:nhheco:2014_016
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    Cited by:

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    2. Balandina, Marina (Баландина, Марина) & Baskakova, Irina (Баскакова, Ирина), 2017. "The role of intermediate agents on the either way market of TV advertising [Роль Посредников На Двустороннем Рынке Телевизионной Рекламы]," Sotsium i vlast / Society and power, Russian Presidential Academy of National Economy and Public Administration, pages 96-103.
    3. Anna D’Annunzio & Antonio Russo, 2020. "Ad Networks and Consumer Tracking," Management Science, INFORMS, vol. 66(11), pages 5040-5058, November.
    4. Baake, Pio & Sudaric, Slobodan, 2019. "Net neutrality and CDN intermediation," Information Economics and Policy, Elsevier, vol. 46(C), pages 55-67.
    5. Greiner, Tanja & Sahm, Marco, 2018. "How effective are advertising bans? On the demand for quality in two-sided media markets," Information Economics and Policy, Elsevier, vol. 43(C), pages 48-60.

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    More about this item

    Keywords

    Vertical relations; advertising; media economics.;
    All these keywords.

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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