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Fragmented Duopoly: A Conceptual and Empirical Investigation

Author

Listed:
  • T. Randolph Beard

    (Auburn University)

  • George S. Ford

    (Phoenix Center for Advanced Legal and Economic Public Policy Studies)

  • R. Carter Hill

    (CEBA, Louisiana State University)

Abstract

Where wireline distribution networks compete, each network typically has some customers over which it competes and others for which it is the sole provider. This paper conceptually and empirically assesses the effects of such competition on market prices, demand, and service quality for cable television service. The results suggest that the effectiveness of competition in lowering prices is contingent on the degree of system overlap. In particular, in equilibrium, an increase in overlap substantially reduces prices. The conceptual model of fragmented duopoly developed in the paper may be useful in analyzing emerging competition in other network distribution industries.

Suggested Citation

  • T. Randolph Beard & George S. Ford & R. Carter Hill, 2005. "Fragmented Duopoly: A Conceptual and Empirical Investigation," The Journal of Business, University of Chicago Press, vol. 78(6), pages 2377-2396, November.
    • Handle: RePEc:ucp:jnlbus:v:78:y:2005:i:6:p:2377-2396
    DOI: 10.1086/497051
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    Cited by:

    1. Gregory S. Crawford & Ali Yurukoglu, 2012. "The Welfare Effects of Bundling in Multichannel Television Markets," American Economic Review, American Economic Association, vol. 102(2), pages 643-685, April.
    2. Dimitra Petropoulou, 2007. "Competing for Contacts: Network Competition, Trade Intermediation and Fragmented Duopoly," Economics Series Working Papers 371, University of Oxford, Department of Economics.
    3. T. Randolph Beard & Michael L. Stern, 2008. "Continuous Cross Subsidies And Quantity Restrictions," Journal of Industrial Economics, Wiley Blackwell, vol. 56(4), pages 840-861, December.

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