The Welfare Effects of Vertical Integration in Multichannel Television Markets

Gregory Crawford, Robin Lee, Michael Whinston and Ali Yurukoglu

No 21832, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We investigate the welfare effects of vertical integration of regional sports networks (RSNs) with programming distributors in U.S. multichannel television markets. Vertical integration can enhance efficiency by reducing double marginalization and increasing carriage of channels, but can also harm welfare due to foreclosure and incentives to raise rivals' costs. We estimate a structural model of viewership, subscription, distributor pricing, and affiliate fee bargaining using a rich dataset on the U.S. cable and satellite television industry (2000-2010). We use these estimates to analyze the impact of simulated vertical mergers and divestitures of RSNs on competition and welfare, and examine the efficacy of regulatory policies introduced by the U.S. Federal Communications Commission to address competition concerns in this industry.

JEL-codes: L13 L42 L51 L82 (search for similar items in EconPapers)
Date: 2015-12
New Economics Papers: this item is included in nep-com, nep-cul and nep-mkt
Note: IO
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Citations: View citations in EconPapers (18)

Published as Gregory S. Crawford & Robin S. Lee & Michael D. Whinston & Ali Yurukoglu, 2018. "The Welfare Effects of Vertical Integration in Multichannel Television Markets," Econometrica, Econometric Society, vol. 86(3), pages 891-954, May.

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Related works:
Journal Article: The Welfare Effects of Vertical Integration in Multichannel Television Markets (2018)
Working Paper: The Welfare Effects of Vertical Integration in Multichannel Television Markets (2016)
Working Paper: The Welfare Effects of Vertical Integration in Multichannel Television Markets (2013)
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