Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/49528
Authors: 
Greiner, Tanja
Sahm, Marco
Year of Publication: 
2011
Series/Report no.: 
CESifo working paper: Industrial Organisation 3524
Abstract: 
We study a two-sided markets model of two competing television stations that offer content of differentiated quality to ad-averse consumers and advertising space to firms. As all consumers prefer high over low quality content, competition for viewers is vertical. By contrast, competition for advertisers is horizontal, taking into account the firms' targeted advertising motive. We analyze the impact of both the strength of mutual externalities and advertisement regulation policies on the viewers' equilibrium demand for high quality content. We find that, although consumers dislike advertisements, an advertising ban in the high quality medium reduces its viewer market share and thereby the equilibrium reception of high quality content.
Subjects: 
horizontal and vertical product differentiation
two-sided externalities
advertising ban
JEL: 
D21
L13
L51
L82
Document Type: 
Working Paper

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