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Newspapers and Advertising: The Effects of Ad-Valorem Taxation under Duopoly

Author

Listed:
  • Kind, Hans Jarle

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

  • Schjelderup, Guttorm

    (Dept. of Finance and Management Science, Norwegian School of Economics and Business Administration)

  • Stähler, Frank

    (Dept. of Economics, University of Otago)

Abstract

Newspapers are two-sided platforms that sell their product both to readers and advertisers. Media firms in general, and newspapers in particular, are considered important providers of information, culture and language in most countries. Newspapers are therefore given preferential tax treatment. We show that lower ad valorem taxes lead newspapers to become more differentiated. Thereby the competitive pressure falls, possibly resulting in higher newspaper prices and reduced quality investments.

Suggested Citation

  • Kind, Hans Jarle & Schjelderup, Guttorm & Stähler, Frank, 2007. "Newspapers and Advertising: The Effects of Ad-Valorem Taxation under Duopoly," Discussion Papers 2007/5, Norwegian School of Economics, Department of Business and Management Science.
    • Handle: RePEc:hhs:nhhfms:2007_005
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    File URL: http://hdl.handle.net/11250/163882
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Two-sided markets; ad-valorem taxes;

    JEL classification:

    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H22 - Public Economics - - Taxation, Subsidies, and Revenue - - - Incidence
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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