Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/78264
Authors: 
Lehmann, Erik
Weigand, Jürgen
Year of Publication: 
1998
Series/Report no.: 
Thünen-Series of Applied Economic Theory 14
Abstract: 
The anomalous inverse concentration-price relationship observed by some researchers in the newspaper market has been attributed to scale economies. In this paper we suggest that the newspaper's (or magazine's) double-product feature (i.e., news supplied to readers and advertising space supplied to advertisers) is the main source of this anomaly. In a simple oligopoly model it is shown how a profit-maximizing publisher takes advantage of that feature. Empirically an inverse concentration-price relationship may arise if double-product pricing is not controlled for. Regression results for a cross-section of 222 German Newspapers and magazines corroborate the theoretical implications.
Subjects: 
Scale Economics
Advertising
Concentration
Pricing Behavior
JEL: 
D4
L13
L82
Document Type: 
Working Paper

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