nep-ind New Economics Papers
on Industrial Organization
Issue of 2011‒01‒16
one paper chosen by
Kwang Soo Cheong
Johns Hopkins University

  1. Semi-collusion in media markets By Dewenter, Ralf; Haucap, Justus; Wenzel, Tobias

  1. 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

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