Quality Provision in Interrelated Markets

University FAF Economics Discussion Paper No. 7

50 Pages Posted: 4 Sep 2003

See all articles by Ralf Dewenter

Ralf Dewenter

University of the Federal Armed Forces Hamburg - Department of Economics

Date Written: June 2003

Abstract

This paper analyses the quality provision of interrelated market firms under different market structures both theoretically and empirically. A theoretical model is built, where a media firm offers newspapers in a primary market and advertising space in the secondary market. Furthermore, the media firm is assumed to choose a continuous quality level for advertisements. To test the hypotheses from the theoretical model empirically,we use data on German regional newspapers. The theoretical outcomes as well as the empirical results support the hypothesis that a monopolist provides a higher quality than a duopolist.

Keywords: Quality Provision, Interrelated Markets, Pricing, Market Structure

JEL Classification: L10, L15, L20

Suggested Citation

Dewenter, Ralf, Quality Provision in Interrelated Markets (June 2003). University FAF Economics Discussion Paper No. 7, Available at SSRN: https://ssrn.com/abstract=429502 or http://dx.doi.org/10.2139/ssrn.429502

Ralf Dewenter (Contact Author)

University of the Federal Armed Forces Hamburg - Department of Economics ( email )

Holstenhofweg 85
Hamburg, 22043
Germany

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