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Optimal Divisionalization of Cable Television Networks


  • João Leitão

    (Universidade da Beira Interior)


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.

Suggested Citation

  • João Leitão, 2003. "Optimal Divisionalization of Cable Television Networks," Industrial Organization 0303013, EconWPA, revised 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

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    References listed on IDEAS

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    More about this item


    Optimal Divisionalization; Franchising; Vertical Integration.;

    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


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