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The effects of mergers on product positioning: evidence from the music radio industry

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  • Andrew Sweeting
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    Abstract

    This article shows that mergers between close competitors in the music radio industry lead to important changes in product positioning. Firms that buy competing stations tend to differentiate them and, consistent with the firm wanting to reduce audience cannibalization, their combined audience increases. However, the merging stations also become more like competitors, so that aggregate variety does not increase, and the gains in market share come at the expense of other stations in the same format. The results shed light on the effects of mergers and, more broadly, on how multiproduct firms may use product positioning as a competitive tool. Copyright (c) 2010, RAND.

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    Bibliographic Info

    Article provided by RAND Corporation in its journal The RAND Journal of Economics.

    Volume (Year): 41 (2010)
    Issue (Month): 2 ()
    Pages: 372-397

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    Handle: RePEc:bla:randje:v:41:y:2010:i:2:p:372-397

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    Cited by:
    1. Filistrucchi, L. & Antonielli, M., 2012. "Collusion and the Political Differentiation of Newspapers," Discussion Paper 2012-024, Tilburg University, Center for Economic Research.
    2. Brekke, Kurt R. & Siciliani, Luigi & Straume, Odd Rune, 2014. "Horizontal Mergers and Product Quality-," Discussion Paper Series in Economics 4/2014, Department of Economics, Norwegian School of Economics.
    3. Rennhoff, Adam D. & Wilbur, Kenneth C., 2014. "Market-based measures of viewpoint diversity," Information Economics and Policy, Elsevier, vol. 26(C), pages 1-11.
    4. Crawford, Gregory S., 2012. "Endogenous product choice: A progress report," International Journal of Industrial Organization, Elsevier, vol. 30(3), pages 315-320.
    5. Takaki, Masaya & Matsubayashi, Nobuo, 2013. "Sequential multi-store location in a duopoly," Regional Science and Urban Economics, Elsevier, vol. 43(3), pages 491-506.
    6. Hwang, M. & Bronnenberg, B.J. & Thomadsen, R., 2010. "An empirical analysis of assortment similarities across U.S. supermarkets," Open Access publications from Tilburg University urn:nbn:nl:ui:12-3736994, Tilburg University.

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