Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/80501
Authors: 
Foros, Oystein
Kind, Hans Jarle
Shaffer, Greg
Year of Publication: 
2013
Series/Report no.: 
CESifo Working Paper 4362
Abstract: 
The agency model used by Apple and other platform providers such as Google allows upstream firms (content providers like book publishers and developers of apps) to choose the retail prices of their products (RPM) subject to a fixed revenue-sharing rule. We show that (i) this leads to higher prices if the competitive pressure is higher downstream than upstream; (ii) upstream firms earn positive surplus even when platform providers have all the bargaining power; and (iii) with asymmetric business formats (where only some platform providers use the agency model), a retail most-favored-nation clause leads to retail prices that resemble the outcome under industry-wide RPM.
Subjects: 
the agency model
resale price maintenance
most-favored nation clauses
revenue sharing
JEL: 
L13
L41
L42
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.