Market Shares in Two-Sided Media Industries
AbstractThis paper generalizes the frequently used Hotelling model for two-sided markets in order to determine the equilibrium market shares. We show that advertisement levels depend neither on the media price nor on the location of the media firm. An increase in advertising revenues does not change location but only the media price. If the distribution of consumers is asymmetric, market shares will be asymmetric as well, and the media firm with the larger market share charges the higher media price. The larger firm makes a higher profit per reader and in aggregate compared to its smaller rival.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 2737.
Date of creation: 2009
Date of revision:
Hotelling; general density function; media; location;
Other versions of this item:
- Hans Jarle Kind & Frank Stähler, 2010. "Market Shares in Two-Sided Media Industries," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 166(2), pages 205-211, June.
- D43 - Microeconomics - - Market Structure and Pricing - - - Oligopoly and Other Forms of Market Imperfection
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-1561, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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374, Institut d'Économie Industrielle (IDEI), Toulouse.
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- repec:fth:inseep:2000-28 is not listed on IDEAS
- Wenjiao Che & Toshiki Kodera, 2014. "Product differentiation and advertising in multiple markets," Economics Bulletin, AccessEcon, vol. 34(1), pages 400-408.
- Tanja Greiner & Marco Sahm, 2011. "How Effective are Advertising Bans? On the Demand for Quality in Two-Sided Media Markets," CESifo Working Paper Series 3524, CESifo Group Munich.
- 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.
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