Dynamic Product Repositioning in Differentiated Product Markets: The Case of Format Switching in the Commercial Radio Industry

Andrew Sweeting

No 13522, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: The ability of firms to reposition their products can determine the effects of demand shocks, mergers and policy interventions in differentiated product markets. This paper estimates a dynamic oligopoly model to measure repositioning costs in the commercial radio industry. Based on a set of markets where industry revenues were around $88 billion, I find that stations may have spent as much as $6 billion on repositioning. However, repositioning costs are not large enough to prevent radio markets adapting quite quickly to demand shocks.

JEL-codes: L1 L13 L82 (search for similar items in EconPapers)
Date: 2007-10
New Economics Papers: this item is included in nep-com, nep-cul and nep-mic
Note: IO
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Citations: View citations in EconPapers (25)

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