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Fragmented Duopoly: A Conceptual and Empirical Investigation

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  • T. Randolph Beard

    (Auburn University)

  • George S. Ford

    (Phoenix Center for Advanced Legal and Economic Public Policy Studies)

  • R. Carter Hill

    (CEBA, Louisiana State University)

Abstract

Where wireline distribution networks compete, each network typically has some customers over which it competes and others for which it is the sole provider. This paper conceptually and empirically assesses the effects of such competition on market prices, demand, and service quality for cable television service. The results suggest that the effectiveness of competition in lowering prices is contingent on the degree of system overlap. In particular, in equilibrium, an increase in overlap substantially reduces prices. The conceptual model of fragmented duopoly developed in the paper may be useful in analyzing emerging competition in other network distribution industries.

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Bibliographic Info

Article provided by University of Chicago Press in its journal Journal of Business.

Volume (Year): 78 (2005)
Issue (Month): 6 (November)
Pages: 2377-2396

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Handle: RePEc:ucp:jnlbus:v:78:y:2005:i:6:p:2377-2396

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Web page: http://www.journals.uchicago.edu/JB/

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Cited by:
  1. Crawford, Gregory S & Yurukoglu, Ali, 2011. "The Welfare Effects of Bundling in Multichannel Television Markets," CEPR Discussion Papers 8370, C.E.P.R. Discussion Papers.
  2. Dimitra Petropoulou, 2008. "Competing for contacts: network competition, trade intermediation and fragmented duopoly," LSE Research Online Documents on Economics 19630, London School of Economics and Political Science, LSE Library.
  3. Dimitra Petropoulou, 2008. "Competing for Contacts: Network Competition, Trade Intermediation and Fragmented Duopoly," CEP Discussion Papers dp0854, Centre for Economic Performance, LSE.

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