Vertical Agreements and User Access

37 Pages Posted: 17 Dec 2018

See all articles by Germain Gaudin

Germain Gaudin

Copenhagen Business School; Telecom ParisTech

Alexander White

Tsinghua University - School of Economics & Management

Date Written: October 18, 2018

Abstract

Platforms acting as sales channels for producers often charge users for access, via a subscription fee or a markup on hardware. We compare two common forms of vertical pricing agreement that platforms use with sellers: per-­unit and proportional fees. In particular, we analyze the critical role that user access plays on equilibrium prices and profits under both forms of agreement. We characterize this role and show how it potentially overturns standard results saying that proportional fees lead to lower prices and higher profits.

Keywords: Platforms, User Access, Per-Unit vs. Proportional Fees, Wholesale vs. Agency Agreements, Unit vs. Ad Valorem Taxation, Antitrust

JEL Classification: D21, D40, L23, L4, L42, L51, L82, L86

Suggested Citation

Gaudin, Germain and White, Alexander, Vertical Agreements and User Access (October 18, 2018). Available at SSRN: https://ssrn.com/abstract=3290295 or http://dx.doi.org/10.2139/ssrn.3290295

Germain Gaudin

Copenhagen Business School

Solbjerg Plads 3
Frederiksberg C, DK - 2000
Denmark

Telecom ParisTech ( email )

46 rue Barrault
F-75634 Paris, Cedex 13
France

Alexander White (Contact Author)

Tsinghua University - School of Economics & Management ( email )

Mailbox A-44
Weilun Building
Beijing, 100084
China

HOME PAGE: http://alex-white.net

Register to save articles to
your library

Register

Paper statistics

Downloads
54
Abstract Views
333
rank
375,566
PlumX Metrics