| By: |
Dewenter, Ralf;
Haucap, Justus;
Wenzel, Tobias |
| Abstract: |
This paper explores the effects that collusion can have in newspaper markets
where firms compete for advertising as well as for readership. We compare
three modes of competition: i) competition in the advertising and the reader
market, ii) semi-collusion over advertising (with competition in the reader
market), and iii) (full) collusion in both the advertising and the reader
market. We find that semi-collusion leads to less advertising (but higher
advertising prices) and lower copy prices which is beneficial for readers.
Under certain circumstances, semi-collusion may even benefit advertisers as
newspaper circulation is higher. In addition, total welfare may rise due to
semi-collusion. Results under full collusion are ambiguous. However, even
under full collusion newspaper copy prices may decrease and welfare may
increase. -- |
| Keywords: |
Media Markets,Collusion,Two-Sided Markets |
| JEL: |
L40 L82 D43 K21 |
| Date: |
2010 |
| URL: |
http://d.repec.org/n?u=RePEc:zbw:dicedp:11&r=ind |