Media Markets with Habit Formation

University FAF Economics Discussion Paper No. 5

56 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

The aim of this paper is to analyse the pricing behaviour of print media firms when consumption on reader markets is addictive or habituated. However, not only the reader but also the advertising market has to be considered by a publisher optimising profits. Because print media markets are highly concentrated a monopoly-monopoly model is built, where both markets are of monopolistic structure. Moreover, a monopoly-duopoly model is considered, where only the reader market is monopolistic but the advertising market is of duopolistic structure. To compare the results from the models regarding habit effects, simple static models are presented as a benchmark.

Suggested Citation

Dewenter, Ralf, Media Markets with Habit Formation (June 2003). University FAF Economics Discussion Paper No. 5, Available at SSRN: https://ssrn.com/abstract=429503 or http://dx.doi.org/10.2139/ssrn.429503

Ralf Dewenter (Contact Author)

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

Holstenhofweg 85
Hamburg, 22043
Germany

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