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COMPETITION IN THE MEDIA AND ADVERTISING MARKETS
Author(s) -
GABSZEWICZ JEAN J.,
LAUSSEL DIDIER,
SONNAC NATHALIE
Publication year - 2006
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/j.1467-9957.2006.00479.x
Subject(s) - advertising , competition (biology) , diversity (politics) , media industry , economics , native advertising , market structure , business , online advertising , microeconomics , computer science , political science , the internet , public relations , biology , world wide web , law , ecology
We examine how media competition is affected when making endogenous advertising rates. To this end, we revisit some well‐known contributions in which advertising rates and volumes are viewed as exogenous, so that the effects of advertising on diversity and industry concentration only depend on the size of the audience, without taking into account how the media audience depends itself on advertising rates. We rely on the two‐sided market structure which characterizes the media and advertising industry and allows advertising rates and audience size to be jointly determined at equilibrium. Finally, we study how making the advertising rate dependent on the audience size may influence the content and diversity of the media industry.