Media Concentration and Consumer Product Prices

14 Pages Posted: 5 Jun 2006

See all articles by Anthony J. Dukes

Anthony J. Dukes

University of Southern California - Marshall School of Business

Abstract

This article examines the interaction of commercial media and retail producers of well-known consumer products when advertising is used to differentiate brands. In particular, I address how competition in the media market affects choices of advertising and program quality. The results suggest counterintuitively that advertisers may actually prefer media markets with less competition for audiences. Product differentiation through advertising is more effective when media markets are less competitive, leading to higher prices for advertised products. As a result, media concentration may lead to higher profits for advertising firms if the additional revenue exceeds the higher advertising costs associated with media concentration.

JEL Classification: L11, L82, M37

Suggested Citation

Dukes, Anthony J., Media Concentration and Consumer Product Prices. Economic Inquiry, Vol. 44, No. 1, pp. 128-141, 2006. Available at SSRN: https://ssrn.com/abstract=906371

Anthony J. Dukes (Contact Author)

University of Southern California - Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States
213-740-3846 (Phone)

HOME PAGE: http://sites.usc.edu/anthonydukes/

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