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Another Tale of Two-Sided markets

  • Hans Jarle Kind


    (Norwegian School of Economics and Business Administration, Bergen, Norway)

  • Frank Staehler


    (Department of Economics, University of Otago)

This note generalizes the frequently used Hotelling model for two-sided markets. We demonstrate an invariance theorem: advertisement levels neither depend on the media price nor on the location of the media firm. An increase in advertising revenues does not change location but only the media price. In conclusion, a Hotelling model of two-sided markets is equivalent to one of one-sided markets.

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Paper provided by University of Otago, Department of Economics in its series Working Papers with number 0708.

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Length: 10 pages
Date of creation: Jun 2007
Date of revision: Jun 2007
Handle: RePEc:otg:wpaper:0708
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  1. GABSZEWICZ, Jean J. & LAUSSEL, Didier & SONNAC, Nathalie, 2000. "Does press advertising foster the “pensée uniqueâ€?," CORE Discussion Papers 2000008, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  2. Gabszewicz, Jean J & Laussel, Didier & Sonnac, Nathalie, 2002. " Press Advertising and the Political Differentiation of Newspapers," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(3), pages 317-34.
  3. Jean-Charles Rochet & Jean Triole, 2002. "Platform competition in two sided markets," LSE Research Online Documents on Economics 24929, London School of Economics and Political Science, LSE Library.
  4. Simon P. Anderson & Stephen Coate, 2005. "Market Provision of Broadcasting: A Welfare Analysis," Review of Economic Studies, Oxford University Press, vol. 72(4), pages 947-972.
  5. Anderson, Simon P. & Goeree, Jacob K. & Ramer, Roald, 1997. "Location, Location, Location," Journal of Economic Theory, Elsevier, vol. 77(1), pages 102-127, November.
  6. Peitz, Martin & Valletti, Tommaso M., 2008. "Content and advertising in the media: Pay-tv versus free-to-air," International Journal of Industrial Organization, Elsevier, vol. 26(4), pages 949-965, July.
  7. Jean-Charles Rochet & Jean Tirole, 2014. "Platform Competition in Two-Sided Markets," CPI Journal, Competition Policy International, vol. 10.
  8. Nathalie Sonnac, 2000. "Readers’ Attitudes Toward Press Advertising : Are They Ad-Lovers or Ad-Averse ?," Working Papers 2000-28, Centre de Recherche en Economie et Statistique.
  9. repec:rje:randje:v:37:y:2006:3:p:645-667 is not listed on IDEAS
  10. Crampes, Claude & Haritchabalet, Carole & Jullien, Bruno, 2006. "Advertising, Competition and Entry in Media Industries," IDEI Working Papers 374, Institut d'Économie Industrielle (IDEI), Toulouse.
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