Optimal Divisionalization of Cable Television Operators Networks
25 Pages Posted: 16 Jun 2003
Date Written: April 2003
In this article, a condition for the optimal division's number is presented, for a market with two cable operators who offer a network service. First, a reason is presented to justify a partial covering of the national market from the cable operators. Second, a problem of moral hazard is revealed, which is able to appear through the implementation of franchising schemes with independent divisions.
Keywords: Optimal Divisionalization, Franchising, Vertical Integration
JEL Classification: L11, L20, M55
Suggested Citation: Suggested Citation