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Market Shares in Two-Sided Media Industries

13 Pages Posted: 6 Aug 2009  

Hans Jarle Kind

Norwegian School of Economics & Business Administration (NHH); CESifo (Center for Economic Studies and Ifo Institute); Norwegian School of Economics (NHH) - Department of Economics

Frank Stähler

University of Tuebingen - Department of Economics; CESifo (Center for Economic Studies and Ifo Institute); University of Adelaide - School of Economics

Date Written: July 1, 2009

Abstract

This paper generalizes the frequently used Hotelling model for two-sided markets in order to determine the equilibrium market shares. We show that advertisement levels depend neither on the media price nor on the location of the media firm. An increase in advertising revenues does not change location but only the media price. If the distribution of consumers is asymmetric, market shares will be asymmetric as well, and the media firm with the larger market share charges the higher media price. The larger firm makes a higher profit per reader and in aggregate compared to its smaller rival.

Keywords: hotelling, general density function, media, location

JEL Classification: D43

Suggested Citation

Kind, Hans Jarle and Stähler, Frank, Market Shares in Two-Sided Media Industries (July 1, 2009). CESifo Working Paper Series No. 2737. Available at SSRN: https://ssrn.com/abstract=1443870

Hans Jarle Kind (Contact Author)

Norwegian School of Economics & Business Administration (NHH) ( email )

Helleveien 30
Bergen, NO-5045
Norway
+47 55 583 890 (Phone)
+47 55 583 901 (Fax)

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Norwegian School of Economics (NHH) - Department of Economics

Helleveien 30
N-5035 Bergen
Norway

Frank Stähler

University of Tuebingen - Department of Economics ( email )

Mohlstrasse 36
D-72074 Tuebingen, 72074
Germany

HOME PAGE: http://www.frank-staehler.de

CESifo (Center for Economic Studies and Ifo Institute) ( email )

Poschinger Str. 5
Munich, DE-81679
Germany

University of Adelaide - School of Economics ( email )

Adelaide SA, 5005
Australia

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