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Newspapers and public grants: A matter of quality
Author(s) -
Battaggion Maria Rosa,
Vaglio Alessandro
Publication year - 2018
Publication title -
scottish journal of political economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.4
H-Index - 46
eISSN - 1467-9485
pISSN - 0036-9292
DOI - 10.1111/sjpe.12152
Subject(s) - newspaper , subsidy , monopoly , quality (philosophy) , duopoly , economics , product differentiation , microeconomics , industrial organization , business , market economy , advertising , cournot competition , philosophy , epistemology
The present paper deals with the issue of newspaper subsidies in a framework of endogenous quality provision. We compare monopoly and duopoly cases in a vertically differentiated model. For monopolies we show that a per‐copy subsidy reduces quality. Conversely, in duopolies in the vertically differentiated model, we show that a state subsidy might increase the quality of the low‐quality newspaper and decrease the quality of the high‐quality newspaper.