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Ad Blocking, Whitelisting, and Advertiser Competition

Author

Listed:
  • Martin Peitz

  • Anton Sobolev

  • Paul Wegener

Abstract

Advertisers post ads on publishers’ websites to attract the attention of consumers (who visit both available publishers). Since advertisers are competing in the product market, an advertiser may have an incentive to foreclose its competitor through excessive advertising. An ad blocker may be present and charge publishers for whitelisting. We fully characterize the equilibrium in which ad blocker, publishers, and advertisers make strategic pricing decisions. Under some conditions, the ad blocker sells whitelisting to one publisher and both publishers are strictly better off than without the ad blocker. Under other conditions, not only publishers but also advertisers or consumers are worse off.

Suggested Citation

  • Martin Peitz & Anton Sobolev & Paul Wegener, 2023. "Ad Blocking, Whitelisting, and Advertiser Competition," CRC TR 224 Discussion Paper Series crctr224_2023_448, University of Bonn and University of Mannheim, Germany.
    • Handle: RePEc:bon:boncrc:crctr224_2023_448
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    File URL: https://www.crctr224.de/research/discussion-papers/archive/dp448
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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