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

  • Andrew Sweeting

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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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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