Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/25916
Authors: 
Kind, Hans Jarle
Koethenbuerger, Marko
Schjelderup, Guttorm
Year of Publication: 
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

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