Media see-saws : winners and losers on media platforms

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URL:	https://ub-madoc.bib.uni-mannheim.de/39750
URN:	urn:nbn:de:bsz:180-madoc-397506
Document Type:	Working paper
Year of publication:	2015
The title of a journal, publication series:	Working Paper Series
Volume:	15-16
Place of publication:	Mannheim
Publication language:	English
Institution:	School of Law and Economics > VWL, Industrieökonomik, Wettbewerbspolitik u. Regulierung (Peitz 2007-)
MADOC publication series:	Department of Economics > Working Paper Series
Subject:	330 Economics
Classification:	JEL: D43 , L13,
Keywords (English):	media economics , mergers , entry , advertising , aggregative games
Abstract:	We customize the aggregative game approach to oligopoly to study asymmetric media markets. 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 of a lower-quality platform increases consumer surplus, but decreases advertiser surplus if industry platform profits decrease with entry. Merger decreases consumer surplus, but advertiser surplus increases when the profits of the higher-quality platform within the merger increase. By contrast, when platforms use two-sided pricing or consumers like advertising,advertiser and consumer interests are often aligned.