Media Market Concentration, Advertising Levels, and Ad Prices

Anderson, Simon P.; Foros, Øystein; Kind, Hans Jarle; Peitz, Martin

doi:10.2139/ssrn.1972283

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Media Market Concentration, Advertising Levels, and Ad Prices

NHH Dept. of Economics Discussion Paper No. 24/2011

18 Pages Posted: 15 Dec 2011

See all articles by Simon P. Anderson

Simon P. Anderson

University of Virginia - Department of Economics

Øystein Foros

Norwegian School of Economics (NHH) - Department of Business and Management Science

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

Martin Peitz

University of Mannheim - Department of Economics

There are 2 versions of this paper

Date Written: December 1, 2011

Abstract

Standard media economics models imply that increased platform competition decreases ad levels and that mergers reduce per-viewer ad prices. The empirical evidence, however, is mixed. We attribute the theoretical predictions to the combined assumptions that there is no advertising congestion and that viewers single-home. Allowing for crowding in viewer attention spans for ads may reverse standard results, as does allowing viewers to multi-home.

Keywords: Media economics, pricing ads, advertising clutter, information congestion, mergers, entry

JEL Classification: D11, D43, L13

Suggested Citation: Suggested Citation

Anderson, Simon P. and Foros, Øystein and Kind, Hans Jarle and Peitz, Martin, Media Market Concentration, Advertising Levels, and Ad Prices (December 1, 2011). NHH Dept. of Economics Discussion Paper No. 24/2011, Available at SSRN: https://ssrn.com/abstract=1972283 or http://dx.doi.org/10.2139/ssrn.1972283