Media Markets with Habit Formation

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in EconStor may AbstractThe aim of this paper is to analyse the pricing behaviour of print media firms when consumption on reader markets is addictive or habituated. However, not only the reader but also the advertising market has to be considered by a publisher optimising profits. Because print media markets are highly concentrated a monopoly-monopoly model is built, where both markets are of monopolistic structure. Moreover, a monopoly-duopoly model is considered, where only the reader market is monopolistic but the advertising market is of duopolistic structure. To compare the results from the models regarding habit effects, simple static models are presented as a benchmark.

Estimating Market Power in a Two-Sided Market: The Case of Newspapers

“…This allows for a di¤erent ranking of newspapers across weekdays, which is very convenient when considering the impact of magazines that are issued in di¤erent days of the week by di¤erent newspapers. 17 Given the particular features of the daily newspapers market in Italy, which, as further discussed below, has always been characterized by weak price competition, we observe price variability across newspapers only in the presence of supplements Identi…cation of the price e¤ect is then obtained by controlling for formation on readership characteristics on the Italian printed media industry. the inclusion of the supplement, under the simple assumption that its quality does not change over time.…”

“…The additional term on the right-hand side of equation (17) represents the fact that under collusion, …rm i takes into account the impact that her decisions have on other …rms' pro…ts, and therefore the price she sets is higher than the one under competition.…”