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Advertising and the rise of the free daily newspapers

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Author Info
Jean J. , GABSZEWICZ (UNIVERSITE CATHOLIQUE DE LOUVAIN, Department of Economics)
Didier, LAUSSEL
Nathalie, SONNAC

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Abstract

We analyze the competition between two newspapers in a vertical differentiation model where the qualities of the journals are determined endogenously in the first stage of the game. We show that when the advertising revenues per reader increase there is a critical value above which the quality of the low quality newspaper discontinuously falls while it become similtaneously a free newspaper. This is beneficial to the high quality journal and detrimental to the readers.

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Publisher Info
Paper provided by Université catholique de Louvain, Département des Sciences Economiques in its series Discussion Papers (ECON - Département des Sciences Economiques) with number 2006045.

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Length: 13
Date of creation: 15 Oct 2006
Date of revision:
Handle: RePEc:ctl:louvec:2006045

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Related research
Keywords: Advertising; Newspaper quality;

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Find related papers by JEL classification:
L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

References listed on IDEAS
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  1. Gabszewicz, Jean J. & Laussel, Dider & Sonnac, Nathalie, 2001. "Press advertising and the ascent of the 'Pensee Unique'," European Economic Review, Elsevier, vol. 45(4-6), pages 641-651, May. [Downloadable!] (restricted)
  2. Gabszewicz, Jean J & Laussel, Didier & Sonnac, Nathalie, 2002. " Press Advertising and the Political Differentiation of Newspapers," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 4(3), pages 317-34. [Downloadable!] (restricted)
  3. Esther Gal-Or & Anthony Dukes, 2003. "Minimum Differentiation in Commercial Media Markets," Journal of Economics & Management Strategy, Blackwell Publishing, vol. 12(3), pages 291-325, 09. [Downloadable!] (restricted)
  4. Simon P. Anderson, 2005. "Market Provision of Broadcasting: A Welfare Analysis," Review of Economic Studies, Blackwell Publishing, vol. 72(4), pages 947-972, October. [Downloadable!] (restricted)
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  5. Jaskold Gabszewicz, J. & Thisse, J. -F., 1979. "Price competition, quality and income disparities," Journal of Economic Theory, Elsevier, vol. 20(3), pages 340-359, June. [Downloadable!] (restricted)
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This page was last updated on 2009-12-1.


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