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Tax Responses in Platform Industries
2009
Social Science Research Network
Two-sided platform ...rms serve distinct customer groups that are connected through interdependent demand, and include major businesses such as the media industry, banking, and the software industry. A well known result of tax incidence is that consumers of a more heavily taxed good pay a higher price and thus buy less of the good. The present paper shows that this result need not hold in a two-sided market. On the contrary, a higher ad valorem tax may lower end-user prices and spur sales.
doi:10.2139/ssrn.1554834
fatcat:kqdczdhg4bagzioxwygdhh77s4