Price Competition, Advertising and Media Market Concentration

Jonas Häckner () and Sten Nyberg

No 2000:3, Research Papers in Economics from Stockholm University, Department of Economics

Abstract:

In media markets, the value of advertisement exposure depends on circulation, and media consumers’ valuation is affected by advertising. This paper analyzes media market competition in a duopoly framework. There exist symmetric and asymmetric equilibria in terms of firm size. There is less scope for asymmetry when products are more differentiated or of higher intrinsic quality. Some media exhibit public good features. This increases the scope for asymmetry when consumers value advertising positively. If their valuation is negative only symmetric equilibria exist. Regulations limiting price competition increase the scope for natural monopoly. Finally, monopoly is a less likely outcome in subscription-based media markets.

Keywords: Market Concentration; Oligopoly; Demand Externalities; Advertising; Media Markets (search for similar items in EconPapers)
JEL-codes: D43 L11 L13 L15 M37 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2000-01-11
New Economics Papers: this item is included in nep-ind and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Related works:
Journal Article: Advertising and Media Market Concentration (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:hhs:sunrpe:2000_0003

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