Scale Economics, Market Power, and Pricing Behavior Evidence from German Newspaper and Magazine Publishing

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Thünen-Series of Applied Economic Theory - Working Paper ; No. 14

Classification and Topics

• Classification: Wirtschaft ; Oligopoly and Other Imperfect Markets ; Entertainment; Media
• Subject: Scale Economics ; Advertising ; Concentration ; Pricing Behavior ; Presseverlag ; Zeitschriftenverlag ; Struktur-Performance-Modell ; Oligopol ; Betriebliche Preispolitik ; Skalenertrag ; Theorie

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lehmann, Erik ; Weigand, Jürgen
• Event: Veröffentlichung
• (who): Universität Rostock, Institut für Volkswirtschaftslehre
• (where): Rostock
• (when): 1998

Further information

• Handle: http://hdl.handle.net/10419/78264
• Last update: 10.03.2025, 11:43 AM CET