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ifo Institut – Leibniz-Institut für Wirtschaftsforschung an der Universität München >
CESifo Working Papers, CESifo Group Munich >
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http://hdl.handle.net/10419/25916
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| Title: | | Taxation in two-sided markets  |
| Authors: | | Kind, Hans Jarle Koethenbuerger, Marko Schjelderup, Guttorm |
| Issue Date: | | 2006 |
| Series/Report no.: | | CESifo working paper 1871 |
| Abstract: | | Two-sided platform firms serve distinct customer groups that are connected through interdependent demand, and include major businesses such as the media industry, banking, and the software industry. A well known textbook result in one-sided markets is that a government may increase a monopolist's output and reduce the deadweight loss by subsidizing output. The present paper shows that this result need not hold in a two-sided market. On the contrary, a higher ad-valorem tax rate - rather than a subsidy - could increase output and enhance welfare. |
| JEL: | | D4 D43 H21 H22 L13 |
| Document Type: | | Working Paper |
| Appears in Collections: | | CESifo Working Papers, CESifo Group Munich
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