Market Shares in Two-Sided Media Industries

Authors: Kind, Hans Jarle; Stähler, Frank

Source: Journal of Institutional and Theoretical Economics JITE, Volume 166, Number 2, June 2010 , pp. 205-211(7)

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Abstract:

This paper generalizes the frequently used Hotelling model for two-sided markets in order to determine the equilibrium market shares. We show that advertisement levels depend neither on the media price nor on the location of the media firm. An increase in advertising revenues does not change the location, but only the media price. If the distribution of consumers is asymmetric, market shares will be asymmetric as well, and the media firm with the larger market share charges the higher media price. The larger firm makes a higher profit per reader and in aggregate than does its smaller rival.

Document Type: Research article

DOI: http://dx.doi.org/10.1628/093245610791343067

Publication date: 2010-06-01

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Founded as Zeitschrift f�r die gesamte Staatswissenschaft in 1844.

As one of the oldest journals in the field of political economy, the Journal of Institutional and Theoretical Economics (JITE) deals traditionally with the problems of economics, social policy, and their legal framework. JITE is listed in the Journal of Economic Literature, the Social Science Citation Index, the International Bibliography of the Social Sciences, and COREJ.
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