Abstract

http://ssrn.com/abstract=1628741
 
 

References (20)



 


 



A Theory of Quality Competition in Newspaper Joint Operating Agreements


Aaron Cranes


Economic Analysis Group US Department of Justice

Charles J. Romeo


U.S. Department of Justice - Economic Analysis Group

June 22, 2010


Abstract:     
Newspaper Joint Operating Agreements (JOAs) are long term, inflexible contracts between metropolitan daily newspapers in the same market. These contracts maintain two editorial voices while combining all business operations of the two competitors in order to capture many of the scale economies that have put an end to newspaper competition in most markets. The question we address is what, if anything, drives newspapers to compete editorially once a JOA is formed? With contract terms that run in the 10s of years, one might reasonably question whether incentives exist to prod the partners to continue rigorous competition. Our study of JOA contracts indicates that the history of JOAs is filled with instances of unprogrammed renegotiations, and that how the partners fare in these negotiations appears to be driven by each party’s relative success in the market since the agreement was initiated. In essence, forming a JOA does not resolve the issue of which newspaper will remain in the marketplace once the JOA terminates. Editorial competition throughout the life of the JOA resolves this issue.

Keywords: Newspaper Joint Operating Agreements, Horizontal Contracts, Quality Competition

JEL Classification: L22, L43, L82

working papers series





Not Available For Download

Date posted: June 23, 2010  

Suggested Citation

Cranes, Aaron and Romeo, Charles J., A Theory of Quality Competition in Newspaper Joint Operating Agreements (June 22, 2010). Available at SSRN: http://ssrn.com/abstract=1628741

Contact Information

Aaron Cranes
Economic Analysis Group US Department of Justice
450 Fifth St. NW
Room 9418
Washington, DC 20530
United States
Charles J. Romeo (Contact Author)
U.S. Department of Justice - Economic Analysis Group ( email )
450 Fifth St. NW
Room 9418
Washington, DC 20530
United States
202-307-5860 (Phone)
202-514-5847 (Fax)
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