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Media see-saws: Winners and losers in platform markets

Simon Anderson () and Martin Peitz

Journal of Economic Theory, 2020, vol. 186, issue C

Abstract: We customize the aggregative game approach to oligopoly to study media platforms which may differ by popularity. Advertiser, platform, and consumer surplus are tied together by a simple summary statistic. When media are ad-financed and ads are a nuisance to consumers we establish see-saws between consumers and advertisers. Entry increases consumer surplus, but decreases advertiser surplus if total platform profits decrease with entry. Merger decreases consumer surplus, but advertiser surplus tends to increase. By contrast, when platforms use two-sided pricing or consumers like advertising, advertiser and consumer interests are often aligned. We show see-saws under alternative homing assumptions.

Keywords: Two-sided markets; Media economics; Mergers; Entry; Aggregative games; Competitive bottleneck (search for similar items in EconPapers)
JEL-codes: D43 L13 (search for similar items in EconPapers)
Date: 2020
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Related works:
Working Paper: Media See-Saws: Winners and Losers in Platform Markets (2019) Downloads
Working Paper: Media See-Saws: Winners and Losers in Platform Markets (2019) Downloads
Working Paper: Media See-saws: Winners and Losers in Platform Markets (2017) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jetheo:v:186:y:2020:i:c:s0022053119301346

DOI: 10.1016/j.jet.2019.104990

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