Media Competition on the Internet
We present a model of competition between two advertising-financed media firms when consumers dislike advertising. We apply the model to analyze competition between Internet portals and find that equilibrium prices of advertising are higher the less differentiated the portals are perceived to be. Moreover, we find that the portals' aggregate profit increases if they integrate vertically with advertisers. This is true even if there is perfect competition between advertisers for advertising space. But if the portals are close substitutes, then it is profitable for one of the portals not to combine with an advertiser, and we end up with an asymmetric equilibrium with only one vertical merger - despite aggregate profits being higher with two.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 4 (2005)
Issue (Month): 1 (January)
|Contact details of provider:|| Web page: https://www.degruyter.com|
|Order Information:||Web: https://www.degruyter.com/view/j/bejeap|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Tore Nilssen & Lars Sørgard, 1998. "Time Schedule and Program Profile: TV News in Norway and Denmark," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 7(2), pages 209-235, 06.
- Simon P. Anderson & Stephen Coate, 2000. "Market Provision of Public Goods: The Case of Broadcasting," NBER Working Papers 7513, National Bureau of Economic Research, Inc.
- Nilssen,T. & Sorgard,L., 2001. "The TV industry : advertising and programming," Memorandum 18/2001, Oslo University, Department of Economics.