Apple's agency model and the role of most-favored-nation clauses.

The agency model used by Apple and other digital platforms delegates retail-pricing decisions to upstream content providers subject to a fixed revenue-sharing rule. Given competition both upstream and downstream, we consider how, under the agency model, retail prices depend on the firms' revenue-sha...

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Publicado en:RAND Journal of Economics (Wiley-Blackwell) Vol. 48; no. 3; pp. 673 - 704
Autores principales: Foros, Øystein, Kind, Hans Jarle, Shaffer, Greg
Formato: Artículo
Publicado: Wiley-Blackwell Fall2017
Materias:
Acceso en línea:Ver este registro en EBSCOhost
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        atl: Apple's agency model and the role of most-favored-nation clauses.
      aug:
        au:
          Foros, Øystein
          Kind, Hans Jarle
          Shaffer, Greg
        affil:
          NHH Norwegian School of Economics
          NHH Norwegian School of Economics and CESifo
          University of Rochester
      su:
        Apple Inc.
        Consumer attitudes
        Mathematical models of pricing
        Revenue sharing (Corporations)
        Corporate profits
      sug:
        subj:
          Consumer attitudes
          Apple Inc.
          Mathematical models of pricing
          Revenue sharing (Corporations)
          Corporate profits
      ab: The agency model used by Apple and other digital platforms delegates retail-pricing decisions to upstream content providers subject to a fixed revenue-sharing rule. Given competition both upstream and downstream, we consider how, under the agency model, retail prices depend on the firms' revenue-sharing splits and the degrees to which consumers view the platforms and the goods sold on the platforms to be substitutes. We show that the agency model may not be universally adopted even if adoption would mean higher profits for all firms. Use of most-favored-nation clauses in these settings can ensure industry-wide adoption and increase retail prices.
      pubtype: Academic Journal
      doctype: Article
      src: R
    language: English
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