Dessein (2002) - Authority And Communication In Organizations

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Dessein, Wouter (2002), "Authority and Communication in Organizations", The Review of Economic Studies, Vol. 69, No. 4. (Oct.), pp. 811-838. link pdf


We analyze a model of imperfect price competition between intermediation service providers. We insist on features that are relevantfor informational intermediation via the Internet: the presence of indirect network externalities, the possibility of using the nonexclusive services of several intermediaries, and the widespread practice of price discrimination based on users' identity and on usage. Efficient market structures emerge in equilibrium, as well as some specific form of inefficient structures. Intermediaries have incentives to propose non-exclusive services, as this moderates competition and allows them to exert market power We analyze in detail the pricing and business strategies followed by intermediation service providers.