Ad Blocking, Whitelisting, and Advertiser Competition

Martin Peitz, Anton Sobolev () and Paul Wegener ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: Advertisers post ads on publishers’ websites to attract the attention of consumers (who visit both available publishers). Since advertisers are competing in the product market, an advertiser may have an incentive to foreclose its competitor through excessive advertising. An ad blocker may be present and charge publishers for whitelisting. We fully characterize the equilibrium in which ad blocker, publishers, and advertisers make strategic pricing decisions. Under some conditions, the ad blocker sells whitelisting to one publisher and both publishers are strictly better off than without the ad blocker. Under other conditions, not only publishers but also advertisers or consumers are worse off.

Keywords: advertising; advertiser competition; ad blocker; whitelisting; imperfect competition (search for similar items in EconPapers)
JEL-codes: L12 L13 L15 M37 (search for similar items in EconPapers)
Pages: 87
Date: 2023-08
New Economics Papers: this item is included in nep-com, nep-gth, nep-ind, nep-mic and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2023_448

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