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Price Coordination in Two-Sided Markets: Competition in the TV Industry

  • Jarle Kind, Hans



  • Nilssen, Tore


    (Dept. of Economics, University of Oslo)

  • Sørgard, Lars



Under the current market structure in the TV industry advertising prices are typically set by TV channels while viewer prices are set by distributors (e.g., cable operators). The latter implies that the distributors partly internalize the competition between the TV channels, since they take into account the fact that a lower viewer price at one channel will reduce the willingness to pay for rival channels. We …find that a shift to a market structure where advertising prices as well as viewer prices are set competitively by the TV channels might increase joint industry pro…ts. The reason is that this market structure, in contrast to the one we observe today, directly addresses the two-sidedness of the market. We also show that this is to the bene…t of the viewers.

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Paper provided by Oslo University, Department of Economics in its series Memorandum with number 18/2010.

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Length: 25 pages
Date of creation: 22 Nov 2010
Date of revision:
Handle: RePEc:hhs:osloec:2010_018
Contact details of provider: Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Phone: 22 85 51 27
Fax: 22 85 50 35
Web page:

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  18. Kenneth C. Wilbur, 2008. "A Two-Sided, Empirical Model of Television Advertising and Viewing Markets," Marketing Science, INFORMS, vol. 27(3), pages 356-378, 05-06.
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