The Market for Fake Observations

Kjell Arne Brekke and Tore Nilsen ()
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Tore Nilsen : Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Authors registered in the RePEc Author Service: Tore Nilssen ()

No 25/2011, Memorandum from Oslo University, Department of Economics

Abstract: We show how increased competition in a media market may have implications for the competition between firms that are advertising in that medium. We apply a simple model of a product market with network externalities where firms buy advertising space in a media market and find that there is more entry in the product market, the more competitive the media market is. The paper is the first combining a study of media markets with a behavioral foundation of how advertising a¤ects the demand for the advertised products.

Keywords: Advertising; Media Market; Availability Heuristic; Network Externalities (search for similar items in EconPapers)
JEL-codes: L82 M37 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2011-11-04
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Published as Brekke, Kjell Arne and Tore Nilssen, 'Media Competition Enhances New-Product Entry: On the Market for Fake Observations' in Information Economics and Policy, 2015, pages 59-66.

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