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As Seen on TV: Price Discrimination and Competition in Television Advertising

Ricard Gil (), Daniel Riera-Crichton () and Christian Ruzzier ()

MPRA Paper from University Library of Munich, Germany

Abstract: In this paper we examine the empirical relationship between price discrimination and competition in television advertising. While most empirical papers on the topic document a positive relationship, we find that price discrimination is negatively related to competition (as measured by the number of competing firms), a result that is consistent with conventional wisdom. Our results also show that only incumbent stations (unlike entrants) respond by engaging less in price discrimination when faced with a more competitive environment. Our evidence suggests that incumbents may use price discrimination as a strategic tool to accommodate entry - a strategy that has received scant attention in the existing entry literature.

Keywords: competition; price discrimination; Spanish television (search for similar items in EconPapers)
JEL-codes: D22 D43 L11 L82 (search for similar items in EconPapers)
Date: 2016-12-21
New Economics Papers: this item is included in nep-bec, nep-com, nep-cul and nep-mkt
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