IDEAS home Printed from https://ideas.repec.org/p/usn/usnawp/10.html
   My bibliography  Save this paper

Censorship: the Key to Lock-In?

Author

Listed:
  • Brendan M. Cunningham

    (United States Naval Academy)

Abstract

Markets for information and entertainment are frequently characterized by increasing returns to scale in production and distribution. This implies that incumbent technologies enjoy an advantage over newcomer technologies; such markets can become locked into an inferior technology. Governments often heavily influence media markets through both direct ownership and censorship. I present a dynamic model with heterogeneity among consumers and firms in order to analyze the role of censorship in media markets. I assume there is a negative consumption externality across consumers and a negative cost spillover which an incumbent producer imposes on a newcomer. In a decentralized equilibrium, there is over-production of media from the incumbent technology. This reduces consumer utility and engenders lock-in of the inferior incumbent technology. I model censorship as a tax on information produced under the incumbent technology. A central planner who censors incumbent media can improve upon the decentralized equilibrium by reducing negative consumption externalities and unlocking the superior technology. I also show that censorship is only Pareto optimal when coupled with lump-sum transfers across consumers.

Suggested Citation

  • Brendan M. Cunningham, 2005. "Censorship: the Key to Lock-In?," Departmental Working Papers 10, United States Naval Academy Department of Economics.
    • Handle: RePEc:usn:usnawp:10
    as

    Download full text from publisher

    File URL: http://www.usna.edu/EconDept/RePEc/usn/wp/usnawp10.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Djankov, Simeon & McLiesh, Caralee & Nenova, Tatiana & Shleifer, Andrei, 2003. "Who Owns the Media?," Journal of Law and Economics, University of Chicago Press, vol. 46(2), pages 341-381, October.
    2. Liebowitz, S J & Margolis, Stephen E, 1990. "The Fable of the Keys," Journal of Law and Economics, University of Chicago Press, vol. 33(1), pages 1-25, April.
    3. David, Paul A, 1985. "Clio and the Economics of QWERTY," American Economic Review, American Economic Association, vol. 75(2), pages 332-337, May.
    4. Brendan M. Cunningham & Peter J. Alexander, 2004. "A Theory of Broadcast Media Concentration and Commercial Advertising," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 6(4), pages 557-575, October.
    5. Simon P. Anderson & Stephen Coate, 2005. "Market Provision of Broadcasting: A Welfare Analysis," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 72(4), pages 947-972.
    6. Cowan, Robin & Gunby, Philip, 1996. "Sprayed to Death: Path Dependence, Lock-In and Pest Control Strategies," Economic Journal, Royal Economic Society, vol. 106(436), pages 521-542, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. P.J. Lamberson & Scott E. Page, 2018. "First mover or higher quality? Optimal product strategy in markets with positive feedbacks," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 27(1), pages 40-52, March.
    2. Puffert, Douglas J., 2002. "Path Dependence in Spatial Networks: The Standardization of Railway Track Gauge," Explorations in Economic History, Elsevier, vol. 39(3), pages 282-314, July.
    3. Daniel Birke, 2009. "The Economics Of Networks: A Survey Of The Empirical Literature," Journal of Economic Surveys, Wiley Blackwell, vol. 23(4), pages 762-793, September.
    4. Maria Battaggion & Alessandro Vaglio, 2015. "Watchdogs, Platforms and Audience: An Economic Perspective on Media Markets," Atlantic Economic Journal, Springer;International Atlantic Economic Society, vol. 43(2), pages 209-228, June.
    5. Heli Koski & Tobias Kretschmer, 2004. "Survey on Competing in Network Industries: Firm Strategies, Market Outcomes, and Policy Implications," Journal of Industry, Competition and Trade, Springer, vol. 4(1), pages 5-31, March.
    6. Jean‐Philippe Vergne & Rodolphe Durand, 2010. "The Missing Link Between the Theory and Empirics of Path Dependence: Conceptual Clarification, Testability Issue, and Methodological Implications," Journal of Management Studies, Wiley Blackwell, vol. 47(4), pages 736-759, June.
    7. Choi, Young Back, 2008. "Path dependence and the Korean alphabet," Journal of Economic Behavior & Organization, Elsevier, vol. 65(2), pages 185-201, February.
    8. Scott, Peter, 2001. "Path Dependence and Britain's "Coal Wagon Problem"," Explorations in Economic History, Elsevier, vol. 38(3), pages 366-385, July.
    9. Arne Petermann & Georg Schreyögg & Daniel Fürstenau, 2019. "Can hierarchy hold back the dynamics of self-reinforcing processes? A simulation study on path dependence in hierarchies," Business Research, Springer;German Academic Association for Business Research, vol. 12(2), pages 637-669, December.
    10. Wiebke Roß & Jens Weghake, 2018. "Wa(h)re Liebe: Was Online-Dating-Plattformen über zweiseitige Märkte lehren," TUC Working Papers in Economics 0017, Abteilung für Volkswirtschaftslehre, Technische Universität Clausthal (Department of Economics, Technical University Clausthal).
    11. Alessandro Olper & Johan Swinnen, 2013. "Mass Media and Public Policy: Global Evidence from Agricultural Policies," The World Bank Economic Review, World Bank, vol. 27(3), pages 413-436.
    12. Christian Dahl Winther, 2007. "Optimal research effort and product differentiation in network industries," Economics Working Papers 2007-19, Department of Economics and Business Economics, Aarhus University.
    13. Bernhard Ebbinghaus, 2009. "Can Path Dependence Explain Institutional Change? Two Approaches Applied to Welfare State Reform," Chapters, in: Lars Magnusson & Jan Ottosson (ed.), The Evolution of Path Dependence, chapter 8, Edward Elgar Publishing.
    14. Julia Rothbauer & Gernot Sieg, 2013. "Public Service Broadcasting of Sport, Shows, and News to Mitigate Rational Ignorance," Journal of Media Economics, Taylor & Francis Journals, vol. 26(1), pages 21-40, March.
    15. Vialle, Pierre & Song, Junjie & Zhang, Jian, 2012. "Competing with dominant global standards in a catching-up context. The case of mobile standards in China," Telecommunications Policy, Elsevier, vol. 36(10), pages 832-846.
    16. John Kemp & Ted Wilson, 1999. "Monetary Regime Transformation: The scramble to gold in the late nineteenth century," Review of Political Economy, Taylor & Francis Journals, vol. 11(2), pages 125-149.
    17. Ramani, Shyama V. & Thutupalli, Ajay, 2015. "Emergence of controversy in technology transitions: Green Revolution and Bt cotton in India," Technological Forecasting and Social Change, Elsevier, vol. 100(C), pages 198-212.
    18. Magrini, Marie-Benoit & Anton, Marc & Cholez, Célia & Corre-Hellou, Guenaelle & Duc, Gérard & Jeuffroy, Marie-Hélène & Meynard, Jean-Marc & Pelzer, Elise & Voisin, Anne-Sophie & Walrand, Stéphane, 2016. "Why are grain-legumes rarely present in cropping systems despite their environmental and nutritional benefits? Analyzing lock-in in the French agrifood system," Ecological Economics, Elsevier, vol. 126(C), pages 152-162.
    19. Marc Flandreau & Clemens Jobst, 2006. "The Empirics of International Currencies: Evidence from the 19th Century," Sciences Po publications n°5529, Sciences Po.
    20. Ohki, Kazuyoshi, 2021. "Should public broadcasting companies be continued, scrambled, disbanded or privatized?," MPRA Paper 106766, University Library of Munich, Germany.

    More about this item

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:usn:usnawp:10. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: the person in charge (email available below). General contact details of provider: https://edirc.repec.org/data/ednavus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.