The agency model used by Apple and other platform providers such as Google allows upstream firms (content providers like book publishers and developers of apps) to choose the retail prices of their products (RPM) subject to a fixed revenue-sharing rule. We show that (i) this leads to higher...

Weyl and Fabinger (2013) analyze the social incidence of competition and theoutput and welfare effects of third-degree price discrimination by considering thehypothetical entrance of exogenous quantity into a market. The formulas they use forthis purpose, however, are correct only for marginal...

The agency model used by Apple and other platform providers such as Google allows upstream firms (content providers like book publishers and developers of apps) to choose the retail prices of their products (RPM) subject to a fixed revenue-sharing rule. We show that (i) this leads to higher...