Free Entry and Social Inefficiency in Radio Broadcasting

Berry, Steven; Waldfogel, Joel

doi:10.2307/2556055

Cited by 261 publications

(181 citation statements)

References 7 publications

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“…The model follows Berry and Waldfogel (1999). It maps the classical framework for the analysis of differentiated products, based on conditional indirect utilities (Berry 1994, Berry, Levinsohn and Pakes 1995), onto two stage game in which firms, on the first stage, decide whether or not to enter a market and, on the second stage, compete on price, conditional on having entered.…”

Section: Econometric Modelmentioning

confidence: 99%

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Price-Concentration Analysis in Merger Cases with Differentiated Products

Beckert

Mazzarotto²

2010

Economics

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This paper considers the empirical assessment of the relationship between prices and number of firms in local markets in geographic or, more generally, characteristic space and its use as evidence in merger cases. It outlines a structural, seminonparametric econometric model of competition in such markets, examines its testable implications in terms of price-concentration relationships, and demonstrates that the model is non-parametrically identified. This general approach to price-concentration analysis in differentiated product markets is illustrated in a small-scale application to cinemas in the UK. The application highlights the main decision points faced by an authority when assessing the weight that can be attached to this type of analysis as evidence. JEL L11, C31

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Section: Econometric Modelmentioning

confidence: 99%

“…4 Price concentration studies also often feature in the empirical industrial organization literature. 5 Price concentration studies are typically conducted at the industry level, using cross-section or panel data. 6 The general objective of a price concentration study is to investigate how concentration is related to market power, i.e.…”

Section: Introductionmentioning

confidence: 99%

Price-Concentration Analysis in Merger Cases with Differentiated Products

Beckert

Mazzarotto²

2010

Economics

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“…This is more likely if the programmes are good substitutes and if there is much possibility to advertise. 41 Berry and Waldfogel (1999) show for the American radio market (that is an ad-supported market) that the business stealing effect is in fact relevant.…”

Section: Putting the Pieces Togethermentioning

confidence: 99%

Does Public Service Broadcasting Serve The Public? The Future of Television in the Changing Media Landscape

2006

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The media landscape is subject to substantial technological change. In this Discussion Paper we analyse how technological trends affect the economic rationale for PSB. After identifying the aims and nature of PSB, we derive eight possible market failures from the specific economic characteristics of information. The changing relevance of these market failures is subsequently discussed in the light of the technological changes. Based on this analysis, we argue that public service broadcasting (PSB) for the digital age should be light in the sense that it has a much smaller mandate. The main reason for this conclusion is that, due to technological developments, many market failures in the broadcasting industry are no longer relevant. The broadcasting market thus functions more and more like a normal market. This implies that the allocation tends to the efficient outcome, as long as consumer valuation is properly accounted for. This is not the case when there are externalities and possibly not when it comes to valuing quality. In the presence of these market failures, an efficient allocation is not warranted in the broadcasting industry. It is these remaining market failures that give a future PSB a right to exist.

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“…4 There is a critical difference between R&D investment in their study and investment in common property resources in our study: in the former, investment generates private benefits for the investing firm, while in the latter, investment 2 See also von Weizsacker (1980) and Perry (1984). 3 Berry and Waldfogel (1999) empirically examine the problem of excess entry into U.S. commercial radio broadcasting and estimate the welfare loss from excess entry. 4 Haruna and Goel (2011) also consider the problem of excess entry in the presence of cost-reducing R&D with spillovers and show that whether free entry is socially excessive or insufficient depends on the degree of research spillovers.…”

Section: Introductionmentioning

confidence: 96%

Free entry and social inefficiency under co-opetition

Hattori

Yoshikawa

2015

J. Econ.

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We investigate the social desirability of free entry in the co-opetition model in which firms compete in a homogeneous product market while sharing common property resources that affect market size or consumers' willingness to pay for products. We show that free entry leads to socially excessive or insufficient entry into the market in the case of non-commitment co-opetition, depending on the magnitude of "business stealing" and "common property" effects of entry. On the other hand, in the case of pre-commitment co-opetition, free entry leads to excess entry and a decline in the common property resources. Interestingly, in the latter case, the excess entry result of Mankiw and Whinston (1986) and Suzumura and Kiyono (1987) holds even when there are no entry (set-up) costs for entrants. These results have important policy implications for entry regulations.

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Free Entry and Social Inefficiency in Radio Broadcasting

Cited by 261 publications

References 7 publications

Price-Concentration Analysis in Merger Cases with Differentiated Products

Price-Concentration Analysis in Merger Cases with Differentiated Products

Does Public Service Broadcasting Serve The Public? The Future of Television in the Changing Media Landscape

Free entry and social inefficiency under co-opetition

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