Wednesday, February 8, 2012
Posted by D. Daniel Sokol
Simon P. Anderson (University of Virginia), Oystein Foros (Norwegian School of Economics), Hans Jarle Kind (Norwegian School of Economics), and Martin Peitz (University of Mannheim) have a paper on Media market concentration, advertising levels, and ad prices.
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.