Concentration in the press industry and the theory of the "circulation spiral"

Jean Gabszewicz (), Didier Laussel () and Nathalie SONNAC

No 2002064, CORE Discussion Papers from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: In this paper we model a situation of competition between two editors who are rivals in both the newpapers' and advertising industries.. To identify the consequences of this competition, we analyse a two-period sequential game whose players are the editors each selling a differentiated newspaper, like newspapers of different political content.We characterise the equilibria and explore how they depend on the number of ad-avoiders and ad-lovers, and on the intensity of readers' attraction or repulsion feelings for advertising. Our main finding is that equilibria are often observed in the sequential game, at which one of the editors prevents the entry of his rival and fully monopolises both the press and advertising markets.

Date: 2002-11-01
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Related works:
Working Paper: Concentration in the Press Industry and the Theory of the “Circulation Spiral (2003)
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