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Media See-Saws: Winners and Losers in Platform Markets

Author

Listed:
  • Simon P. Anderson

  • Martin Peitz

Abstract

e customize the aggregative game approach to oligopoly to study media platforms which may differ by popularity. Advertiser, platform, and consumer surplus are tied together by a simple summary statistic. When media are ad-financed and ads are a nuisance to consumers we establish see-saws between consumers and advertisers. Entry increases consumer surplus, but decreases advertiser surplus if total platform profits decrease with entry. Merger decreases consumer surplus, but advertiser surplus tends to increase. By contrast, when platforms use two-sided pricing or consumers like advertising, advertiser and consumer interests are often aligned. We show see-saws under alternative homing assumptions.

Suggested Citation

  • Simon P. Anderson & Martin Peitz, 2019. "Media See-Saws: Winners and Losers in Platform Markets," CRC TR 224 Discussion Paper Series crctr224_2019_089v2, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2019_089v2
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp089
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    Cited by:

    1. Sandrini, Luca & Somogyi, Robert, 2023. "Generative AI and deceptive news consumption," Economics Letters, Elsevier, vol. 232(C).
    2. Simon P. Anderson & Øystein Foros & Hans Jarle Kind, 2019. "The importance of consumer multihoming (joint purchases) for market performance: Mergers and entry in media markets," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(1), pages 125-137, January.
    3. Martin Peitz, 2024. "The Economic Theory of Two-Sided Platforms," CRC TR 224 Discussion Paper Series crctr224_2024_584, University of Bonn and University of Mannheim, Germany.
    4. Jullien, Bruno & Sand-Zantman, Wilfried, 2021. "The Economics of Platforms: A Theory Guide for Competition Policy," Information Economics and Policy, Elsevier, vol. 54(C).
    5. Kim Huynh & Gradon Nicholls & Oleksandr Shcherbakov, 2022. "Equilibrium in Two-Sided Markets for Payments: Consumer Awareness and the Welfare Cost of the Interchange Fee," Staff Working Papers 22-15, Bank of Canada.
    6. Raúl Bajo-Buenestado & Markus Kinateder & Raul Bajo-Buenestado, 2023. "Prices and Mergers in a General Model of Multi-Sided Markets," CESifo Working Paper Series 10818, CESifo.
    7. Kohei Kawaguchi & Toshifumi Kuroda & Susumu Sato, 2021. "Merger Analysis in the App Economy: An Empirical Model of Ad-Sponsored Media," HKUST CEP Working Papers Series 202103, HKUST Center for Economic Policy.
    8. Katz, Michael L., 2021. "Big Tech mergers: Innovation, competition for the market, and the acquisition of emerging competitors," Information Economics and Policy, Elsevier, vol. 54(C).
    9. repec:bon:boncrc:crctr224_2023_428v2 is not listed on IDEAS
    10. Shiva Shekhar & Radostina Shopova, 2025. "The Limits of Media See-Saws: Ad-Funded Platform Mergers Can Harm Both Sides," CESifo Working Paper Series 11768, CESifo.
    11. Martin Peitz, 2025. "Governance and Regulation of Platforms," Springer Books, in: Claude Ménard & Mary M. Shirley (ed.), Handbook of New Institutional Economics, edition 0, chapter 23, pages 565-593, Springer.
    12. Luca Sandrini & Robert Somogyi, 2022. "News Media Bargaining Codes," Working Papers 22-06, NET Institute.
    13. Shekhar, Shiva & Shopova, Radostina, 2025. "The limits of media see-saws: Ad-funded platform mergers can harm both sides," Economics Letters, Elsevier, vol. 254(C).
    14. Belleflamme, Paul & Peitz, Martin & Toulemonde, Eric, 2022. "The tension between market shares and profit under platform competition," International Journal of Industrial Organization, Elsevier, vol. 81(C).
    15. Shekhar, Shiva, 2020. "Zero Pricing Platform Competition," MPRA Paper 99364, University Library of Munich, Germany.
    16. Choi, Jay Pil & Jeon, Doh-Shin, 2020. "Platform Design Biases in Two-Sided Markets," TSE Working Papers 20-1143, Toulouse School of Economics (TSE).
    17. Christian Bach & Robert Edwards & Christian Jaag, 2023. "Postal Platform Pricing with Limited Consumer Attention," Working Papers 202318, University of Liverpool, Department of Economics.
    18. Belleflamme, Paul & Peitz, Martin, 2019. "Platform competition: Who benefits from multihoming?," International Journal of Industrial Organization, Elsevier, vol. 64(C), pages 1-26.
    19. Martin Peitz, 2024. "Digital Attention Intermediaries," CRC TR 224 Discussion Paper Series crctr224_2024_520, University of Bonn and University of Mannheim, Germany.
    20. Zennyo, Yusuke, 2020. "Freemium competition among ad-sponsored platforms," Information Economics and Policy, Elsevier, vol. 50(C).
    21. Jan Frederic Nerbel & Markus Kreutzer, 2023. "Digital platform ecosystems in flux: From proprietary digital platforms to wide-spanning ecosystems," Electronic Markets, Springer;IIM University of St. Gallen, vol. 33(1), pages 1-20, December.
    22. Motta, Massimo & Peitz, Martin, 2021. "Big tech mergers," Information Economics and Policy, Elsevier, vol. 54(C).
    23. Simon P. Anderson & Martin Peitz, 2023. "Ad Clutter, Time Use, and Media Diversity," American Economic Journal: Microeconomics, American Economic Association, vol. 15(2), pages 227-270, May.
    24. Peitz, Martin, 2020. "Economic policy for digital attention intermediaries," ZEW Discussion Papers 20-035, ZEW - Leibniz Centre for European Economic Research.
    25. Jay Pil Choi & Doh-Shin Jeon, 2020. "Two-Sided Platforms and Biases in Technology Adoption," CESifo Working Paper Series 8559, CESifo.

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    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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