| Abstract: |
We customize the aggregative game approach to oligopoly to study media
platforms which may differ by popularity. Advertiser, platform, and consumer
surplus are tied together by a simple summary statistic. When media are
ad-financed and ads are a nuisance to consumers we establish see-saws between
consumers and advertisers. Entry increases consumer surplus, but decreases
advertiser surplus if industry platform profits decrease with entry. Merger
decreases consumer surplus, but advertiser surplus tends to increase. By
contrast, when platforms use two-sided pricing or consumers like advertising,
advertiser and consumer interests are often aligned. |