Discussion Paper Details

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Title: Competition for advertisers and for viewers in media markets

Author(s): Simon P Anderson, ystein Foros and Hans Jarle Kind

Publication Date: May 2015

Keyword(s): genre choice, incremental ad pricing, media bias, media economics, multi-homing and overlap

Programme Area(s): Industrial Organization

Abstract: Standard models of advertising-financed media assume consumers patronize a single media platform, precluding effective competition for advertisers. Such competition ensues if consumers multi-home. The principle of incremental pricing implies that multi-homing consumers are less valuable to platforms. Then entry of new platforms decreases ad prices, while a merger increases them, and ad-financed platforms may suffer if a public broadcaster carries ads. Platforms may bias content against multi-homing consumers, especially if consumers highly value overlapping content and/or second impressions have low value.

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Bibliographic Reference

Anderson, S, Foros, and Kind, H. 2015. 'Competition for advertisers and for viewers in media markets'. London, Centre for Economic Policy Research.