Resource title

Taxation in two-sided markets

Resource image

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Resource description

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.

Resource author

Hans Jarle Kind, Marko Koethenbuerger, Guttorm Schjelderup

Resource publisher

Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/25916

Resource license

Adapt according to the presented license agreement and reference the original author.