Semi-collusion in media markets

Ralf Dewenter, Justus Haucap and Tobias Wenzel

International Review of Law and Economics, 2011, vol. 31, issue 2, 92-98

Abstract: 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 (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (31)

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Working Paper: Semi-collusion in media markets (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:irlaec:v:31:y:2011:i:2:p:92-98

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