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Competition In The Media And Advertising Markets

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  • JEAN J. GABSZEWICZ
  • DIDIER LAUSSEL
  • NATHALIE SONNAC

Abstract

We examine how media competition is affected when making endogenous advertising rates. To this end, we revisit some well-known contributions in which advertising rates and volumes are viewed as exogenous, so that the effects of advertising on diversity and industry concentration only depend on the size of the audience, without taking into account how the media audience depends itself on advertising rates. We rely on the two-sided market structure which characterizes the media and advertising industry and allows advertising rates and audience size to be jointly determined at equilibrium. Finally, we study how making the advertising rate dependent on the audience size may influence the content and diversity of the media industry. Copyright Blackwell Publishing Ltd and The University of Manchester, 2006.

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Bibliographic Info

Article provided by University of Manchester in its journal The Manchester School.

Volume (Year): 74 (2006)
Issue (Month): 1 (01)
Pages: 1-22

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Handle: RePEc:bla:manchs:v:74:y:2006:i:1:p:1-22

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Cited by:
  1. Enrico Böhme & Christopher Müller, 2013. "Price-Increasing Competition on Two-Sided Markets with Homogeneous Platforms," Journal of Industry, Competition and Trade, Springer, vol. 13(4), pages 453-479, December.
  2. Anderson, Simon P & Gabszewicz, Jean Jaskold, 2005. "The Media and Advertising: A Tale of Two-Sided Markets," CEPR Discussion Papers 5223, C.E.P.R. Discussion Papers.
  3. Feng Zhu, 2008. "Ad-sponsored Business Models and Compatibility Incentives of Social Networks," Working Papers 08-20, NET Institute, revised Sep 2008.
  4. Monic Sun & Feng Zhu, 2011. "Ad Revenue and Content Commercialization: Evidence from Blogs," Working Papers 11-32, NET Institute.
  5. Ramon Casadesus-Masanell & Feng Zhu, 2009. "Strategies to Fight Ad-sponsored Rivals," Working Papers 09-09, NET Institute, revised Sep 2009.
  6. Hagiu, Andrei & Jullien, Bruno, 2013. "Search Diversion and Platform Competition," IDEI Working Papers 795, Institut d'Économie Industrielle (IDEI), Toulouse.

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