Discussion paper

DP5437 Mixing Media with Two-Part Tariffs

We consider a media market where consumers mix content offered by different firms and firms charge two-part tariffs. As compared to pure linear pricing (pay-per-view), firms make higher profits, while consumers are worse off and the allocation is not first-best. We also consider flat subscription fees and show that they make mixing unattractive. Both two-part tariffs and pay-per-view Pareto-dominate flat fees.

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Citation

Valletti, T and S Hoernig (2006), ‘DP5437 Mixing Media with Two-Part Tariffs‘, CEPR Discussion Paper No. 5437. CEPR Press, Paris & London. https://cepr.org/publications/dp5437