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Advertising and Media Market Concentration

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  • Jonas Hackner
  • Sten Nyberg

Abstract

In media markets, the value of advertisement exposure depends on circulation, and media consumers' valuation is affected by advertising. This article analyzes media market competition in a duopoly framework. There exist symmetric and asymmetric equilibria in terms of firm size, and sometimes a natural monopoly may emerge. There is less scope for asymmetry when products are more differentiated. Some media exhibit public good features. This increases the scope for asymmetry when consumers value advertising positively. If their valuation is negative, only symmetric equilibria exist. Regulations limiting price competition increase the scope for natural monopoly.

Suggested Citation

  • Jonas Hackner & Sten Nyberg, 2008. "Advertising and Media Market Concentration," Journal of Media Economics, Taylor & Francis Journals, vol. 21(2), pages 79-96.
  • Handle: RePEc:taf:jmedec:v:21:y:2008:i:2:p:79-96
    DOI: 10.1080/08997760802069861
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    Citations

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    Cited by:

    1. Marco Antonielli & Lapo Filistrucchi, 2011. "Collusion and the political differentiation of newspapers," Working Papers 11-26, NET Institute, revised Nov 2011.
    2. Anderson, Simon P. & Gabszewicz, Jean J., 2006. "The Media and Advertising: A Tale of Two-Sided Markets," Handbook of the Economics of Art and Culture, Elsevier.
    3. 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.
    4. Kremhelmer, Susanne, 2004. "Fairness, Property Rights, and the Market for Media," Munich Dissertations in Economics 2521, University of Munich, Department of Economics.
    5. Böhme, Enrico & Müller, Christopher, 2010. "Comparing Monopoly and Duopoly on a Two-Sided Market without Product Differentiation," MPRA Paper 23568, University Library of Munich, Germany.
    6. 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.
    7. Mangani, Andrea, 2003. "Profit and audience maximization in broadcasting markets," Information Economics and Policy, Elsevier, vol. 15(3), pages 305-315, September.

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