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This paper examines the efficient provision of goods in two-sided markets and characterizes optimal specific and ad-valorem taxes. We show that (i) a monopoly may have too high output compared to the social optimum; (ii) output may be reduced by imposing negative value-added taxes (subsidy) or positive specific taxes.JEL Code: D4, D43, H21, H22, L13.

Standard models of advertising‐financed media assume consumers patronise a single‐media platform, precluding effective competition for advertisers. Such competition ensues if consumers multi‐home. The principle of incremental pricing implies that multi‐homing consumers are less valuable to platforms. Then entry of new platforms decreases advertisement prices, while a merger increases them, and advertisement‐financed platforms may suffer if a public broadcaster carries advertisements. Platforms may bias content against multi‐homing consumers, especially if consumers highly value overlapping content and/or second impressions have low value.

Multinational firms are known to shift profits and countries are known to compete over shifty profits. Two major principles for corporate taxation are Separate Accounting (SA) and Formula Apportionment (FA). These two principles have very different qualities when it comes to preventing profit shifting and preserving national tax autonomy. Most OECD countries use SA. In this paper we show that a reduction in trade barriers lowers equilibrium corporate taxes under SA, but leads to higher taxes under FA. From a welfare point of view, the choice of tax principle is shown to depend on the degree of economic integration. D 2004 Published by Elsevier B.V. .no (H.J. Kind)8 karen.midelfart@nhh.no (K.H. Midelfart). 1 Tel.: +47 55 95 95 90; fax: +47 55 95 93 50. 2 Tel.: +47 55 95 95 10; fax: +47 55 95 93 50.

Abstract:We set up a simple trade model with two countries hosting one firm each. The firms invest in cost-reducing R&D, and each government may grant R&D subsidies to the domestic firm. We show that it is optimal for a government to provide higher R&D subsidies the lower the level of trade costs, even if the firms are independent monopolies. If firms produce imperfect substitutes, policy competition may become so fierce that only one of the firms survives. International policy harmonization eliminates policy competition and ensures a symmetric outcome. However, it is shown that harmonization is not necessarily welfare maximizing. The optimal coordinated policies may imply an asymmetric outcome with R&D subsidies to only one of the firms.

© Dette eksemplar er fremstilt etter avtale med KOPINOR, Stenergate 1, 0050 Oslo. Ytterligere eksemplarfremstilling uten avtale og i strid med åndsverkloven er straffbart og kan medføre erstatningsansvar. CASE -CENTRE FOR ADVANCED STUDIES IN ECONOMICSCASE -Centre for Advanced Studies in Economics -is a joint centre for The Norwegian School of Economics and Business Administration (NHH), The Institute for Research in Economics and Business Administration (SNF) and The University of Bergen (UiB). Research at CASE includes all types of issues based on economic theory and method, and researchers at the Centre have particular expertise within the areas of international trade, industrial economics, labour market economics, factor mobility, economic integration, industrial policy, international macro economics, tax policy, international transport and maritime research. International Trade and Tax PolicyResearch within this area focuses mainly on issues related to international trade and tax policy, and has generally been dominated by projects aiming to provide increased insight into global structural issues and the effect of regional economic integration. The staff have particular expertise within the fields of international real economics (trade, factor mobility, economic integration and industrial policy), international macro economics and international tax policy, but are also actively involved in projects relating to public economics and industrial policy. Industrial EconomicsIndustrial economics is another central research area at the Centre, within which SNF has longstanding traditions. A series of individual studies have been carried out through large framework programmes funded by the Research Council of Norway and major Norwegian companies. The focal point of these studies is strategic company behaviour in industries with few players, where competition effects are modelled and analysed. The studies have provided important structural and empirical insights into deregulation effects within industries such as airlines, telecommunications and energy and have provided significant input to Norwegian competition policies. The research group includes a number of researchers at both UiB and NHH and has an extensive international network. Labour Market EconomicsThe labour market group focuses on mainly two research areas. One central topic is education and family economics. An important aspect is to analyse the production process for human capital; the importance of family, neighbourhood, preschools and schools for adult education and labour market experience. The other main topic is to analyse firm performance and firm restructuring. These analyses include firm performance, adjustment costs, costs of displacement including health costs, the effect of technological change and international trade, and analysis of organisational change. Human ResourcesCASE is a network-based organisation whose staff consists mainly of professors at Department of Economics at NHH and UiB as well as leading international economists who are ...

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The purpose of this article is to analyze how competitive forces may in ‡uence the way media …rms like TV channels raise revenue. A media …rm can either be …nanced by advertising revenue, by direct payment from the viewers (or the readers, if we consider newspapers), or by both. We show that the scope for raising revenues from consumer payment is constrained by other media …rms o¤ering close substitutes. This implies that the less di¤erentiated the media …rms' content, the larger is the fraction of their revenue coming from advertising. A media …rm's scope for raising revenues from ads, on the other hand, is constrained by how many competitors it faces. We should thus expect that direct payment from the media consumers becomes more important the larger the number of competing media products.