Handbook of Media Economics, vol 1A

Handbook of Media Economics, vol 1A

by Simon P. Anderson, Joel Waldfogel, David Stromberg
Released January 2016
Publisher(s): North Holland
ISBN: 9780444627247

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Book description

Handbook of Media Economics provides valuable information on a unique field that has its own theories, evidence, and policies. Understanding the media is important for society, and while new technologies are altering the media, they are also affecting our understanding of their economics.

The book spans the large scope of media economics, simultaneously offering in-depth analysis of particular topics, including the economics of why media are important, how media work (including financing sources, institutional settings, and regulation), what determines media content (including media bias), and the effects of new technologies. The book provides a powerful introduction for those interested in starting research in media economics.

  • Helps academic and non-academic economists understand recent rapid changes in theoretical and empirical advances, in structural empirical methods, and in the media industry's connection with the democratic process
  • Presents the only detailed summary of media economics that emphasizes political economy, merger policy, and competition policy
  • Pays special attention to the economic influences of the Internet, including developments in social media, user-generated content, and advertising, as well as the Internet's effects on newspapers, radio, and television

Table of contents

  1. Front Cover
  2. Handbook of Media Economics
  3. Copyright
  4. Introduction to the Series
  5. Contents (1/2)
  6. Contents (2/2)
  7. Introduction
  8. Contributors
  9. Acknowledgment
  10. Dedication
  11. Part I: Media Market Structure and Performance
    1. Chapter 1: Preference Externalities in Media Markets
      1. 1.1. Introduction
      2. 1.2. Fixed Costs and Heterogeneous Preferences
        1. 1.2.1. Fixed Costs
        2. 1.2.2. Preference Heterogeneity
        3. 1.2.3. Willingness to Consume Second-Choice Products
        4. 1.2.4. Advertiser Finance
        5. 1.2.5. Change in Costs over Time
      3. 1.3. Theory (1/4)
      4. 1.3. Theory (2/4)
      5. 1.3. Theory (3/4)
      6. 1.3. Theory (4/4)
        1. 1.3.1. Classic Models
          1. 1.3.1.1. Preference Externalities with Spectrum Constraints: Steiner and Beebe Models
          2. 1.3.1.2. The Tyranny of the Yuppies
          3. 1.3.1.3. Lowest Common Denominator
        2. 1.3.2. Spatial Models
          1. 1.3.2.1. Negative Preference Externalities Under Monopoly
          2. 1.3.2.2. Preference Externalities Under Duopoly
        3. 1.3.3. Market Size and Equilibrium Media Diversity
        4. 1.3.4. Optimum Media Diversity
        5. 1.3.5. Cross-Group Externalities
        6. 1.3.6. Variety
        7. 1.3.7. Multiple Stations
      7. 1.4. Empirical Results: Facts Relevant to Predictions from Theory (1/2)
      8. 1.4. Empirical Results: Facts Relevant to Predictions from Theory (2/2)
        1. 1.4.1. The Own-Group Preference Externality
          1. 1.4.1.1. Market Size and Entry
          2. 1.4.1.2. Market Size and Variety
          3. 1.4.1.3. Market Size and Quality
          4. 1.4.1.4. Market Size and Consumption
        2. 1.4.2. Preference Externalities with Multiple Consumer Types
          1. 1.4.2.1. Preference Externalities in Markets with Few Products
          2. 1.4.2.2. Preference Externalities with Heterogeneous Consumers in Markets with Many Products
        3. 1.4.3. Efficient Entry and Preference Externalities
      9. 1.5. Technological Change, Fixed Costs, and Preference Externalities
      10. Acknowledgments
      11. References
    2. Chapter 2: The Advertising-Financed Business Model in Two-Sided Media Markets
      1. 2.1. Introduction
      2. 2.2. Cast of Characters
        1. 2.2.1. Consumers
        2. 2.2.2. Advertisers
        3. 2.2.3. Media Platforms
        4. 2.2.4. Other Players
      3. 2.3. Equilibrium Analysis of Single-Homing Viewers/Readers/Listeners/Surfers (1/4)
      4. 2.3. Equilibrium Analysis of Single-Homing Viewers/Readers/Listeners/Surfers (2/4)
      5. 2.3. Equilibrium Analysis of Single-Homing Viewers/Readers/Listeners/Surfers (3/4)
      6. 2.3. Equilibrium Analysis of Single-Homing Viewers/Readers/Listeners/Surfers (4/4)
        1. 2.3.1. The Ad Revenue/Subscription Revenue Balance
        2. 2.3.2. Representative Consumer Models
        3. 2.3.3. Competitive Bottlenecks
        4. 2.3.4. See-Saw Effects in Media Markets
        5. 2.3.5. Heterogeneous Ad-Nuisance Costs, Price Discrimination, and TiVo
        6. 2.3.6. Market Failures in Advertising Finance
        7. 2.3.7. Alternative Equilibrium Concepts: Price Versus Quantity
        8. 2.3.8. Consumer Information
        9. 2.3.9. Nonlinear Tariffs and Insulated Equilibrium
      7. 2.4. Multi-Homing Viewers/Readers (1/3)
      8. 2.4. Multi-Homing Viewers/Readers (2/3)
      9. 2.4. Multi-Homing Viewers/Readers (3/3)
        1. 2.4.1. MHCs and Incremental Pricing of Ads
          1. 2.4.1.1. Endogenous Viewer Choices
        2. 2.4.2. MHC Demand with Observed Ad Levels
        3. 2.4.3. MHCs and Heterogeneous Advertisers
        4. 2.4.4. Information Congestion and MHCs
        5. 2.4.5. Take-Aways and Ways Forward
      10. 2.5. Equilibrium Genre Choices (1/2)
      11. 2.5. Equilibrium Genre Choices (2/2)
        1. 2.5.1. Free-Entry Analysis
      12. 2.6. Further Directions
      13. Acknowledgments
      14. References
    3. chapter 3: Empirical Modeling for Economics of the Media: Consumer and Advertiser Demand, Firm Supply and Firm Entry Model ...
      1. 3.1. Introduction
      2. 3.2. Audience Demand (1/3)
      3. 3.2. Audience Demand (2/3)
      4. 3.2. Audience Demand (3/3)
        1. 3.2.1. Introduction
        2. 3.2.2. Classic Discrete Choice with Observed and Unobserved Product Characteristics
        3. 3.2.3. Identification of Demand Parameters
        4. 3.2.4. Example of a Single-Parameter Nested Logit
        5. 3.2.5. Further Examples of Audience Demand
      5. 3.3. Advertiser Demand
      6. 3.4. The Supply Side: Choice of Prices, Ad Quantity, and Other Continuous Characteristics (1/2)
      7. 3.4. The Supply Side: Choice of Prices, Ad Quantity, and Other Continuous Characteristics (2/2)
      8. 3.5. The Supply Side: Positioning and Entry
        1. 3.5.1. Entry Models with Differentiation
      9. 3.6. Future Challenges
      10. References
    4. Chapter 4: Advertising in Markets
      1. 4.1. Introduction
      2. 4.2. Search and Advertising (1/4)
      3. 4.2. Search and Advertising (2/4)
      4. 4.2. Search and Advertising (3/4)
      5. 4.2. Search and Advertising (4/4)
        1. 4.2.1. Stigler's Question
        2. 4.2.2. Diamond's Question
        3. 4.2.3. Price Advertising and Price Dispersion
        4. 4.2.4. Too Much or Too Little Advertising?
        5. 4.2.5. Price Advertising with Product Differentiation
        6. 4.2.6. Concluding Remarks
      6. 4.3. Product Advertising (1/5)
      7. 4.3. Product Advertising (2/5)
      8. 4.3. Product Advertising (3/5)
      9. 4.3. Product Advertising (4/5)
      10. 4.3. Product Advertising (5/5)
        1. 4.3.1. Nelson's Question
        2. 4.3.2. Empirical Evidence on Advertising Content
        3. 4.3.3. Match Advertising
          1. 4.3.3.1. Direct Information About Experience Goods
          2. 4.3.3.2. Search Goods and Advertising Content
        4. 4.3.4. Advertising of Product Attributes
          1. 4.3.4.1. Unraveling of Quality Information
          2. 4.3.4.2. Disclosure of Horizontal Match Attributes
          3. 4.3.4.3. Competition and Disclosure of Product Attributes
        5. 4.3.5. Misleading Advertising
          1. 4.3.5.1. Cheap Talk
          2. 4.3.5.2. Imperfect Enforcement of Laws on Misleading Advertisements
        6. 4.3.6. Concluding Remarks
      11. 4.4. Advertising as a Signal (1/2)
      12. 4.4. Advertising as a Signal (2/2)
        1. 4.4.1. Nelson Again
        2. 4.4.2. Quality Signaling and Money Burning
          1. 4.4.2.1. Static Quality Signaling
          2. 4.4.2.2. Repeat Purchase and Money Burning
        3. 4.4.3. Advertising and Coordination
        4. 4.4.4. Concluding Remarks
      13. 4.5. Advertising Technology (1/2)
      14. 4.5. Advertising Technology (2/2)
        1. 4.5.1. Advertising Costs
          1. 4.5.1.1. Advertising Costs and Reach
          2. 4.5.1.2. Disclosure Costs
        2. 4.5.2. Targeted Advertising
        3. 4.5.3. Information Congestion
        4. 4.5.4. Concluding Remarks
      15. 4.6. Advertising that Might Not Inform (1/3)
      16. 4.6. Advertising that Might Not Inform (2/3)
      17. 4.6. Advertising that Might Not Inform (3/3)
        1. 4.6.1. Too Much or Too Little Advertising: A Broader Perspective
        2. 4.6.2. Consumer Naivety
        3. 4.6.3. Advertising and Goodwill
        4. 4.6.4. Concluding Remarks
      18. 4.7. Closing Comments
      19. Acknowledgments
      20. References
    5. Chapter 5: Recent Developments in Mass Media: Digitization and Multitasking
      1. 5.1. Recent Trends in Mass Media Consumption (1/2)
      2. 5.1. Recent Trends in Mass Media Consumption (2/2)
        1. 5.1.1. Digitization
        2. 5.1.2. Screen Proliferation
      3. 5.2. Effects of Digitization
        1. 5.2.1. Consumer Control over Advertising Exposure
        2. 5.2.2. Increased Targeting of Advertising
        3. 5.2.3. New Media Business Models
        4. 5.2.4. Media Market Outcomes
      4. 5.3. Effects of Media Multitasking
        1. 5.3.1. Media Complementarities
        2. 5.3.2. Competition for Attention
      5. 5.4. Discussion
      6. Acknowledgments
      7. References
    6. Chapter 6: Merger Policy and Regulation in Media Industries
      1. 6.1. Introduction
      2. 6.2. Price and Quantity Effects of Mergers in Two-Sided Markets (1/2)
      3. 6.2. Price and Quantity Effects of Mergers in Two-Sided Markets (2/2)
        1. 6.2.1. Backdrop: Price and Quantity Effects of Mergers in One-Sided Markets
        2. 6.2.2. Two-Sided Markets and Single-Homing Consumers
        3. 6.2.3. Two-Sided Markets and Multi-Homing Consumers
        4. 6.2.4. Effects of Semi-Collusion Through Joint Operating Agreements
      4. 6.3. Mergers and Platforms Choice of Genres (1/2)
      5. 6.3. Mergers and Platforms Choice of Genres (2/2)
        1. 6.3.1. Maximum Versus Minimum Differentiation
        2. 6.3.2. Steiner (1952): Mergers May Reduce Duplication of Genres
        3. 6.3.3. Consumers Have Second Preferences
        4. 6.3.4. Advertising Effect Differs Between Genres
        5. 6.3.5. Dual Source of Financing: Charging Both Users and Advertisers
        6. 6.3.6. Imperfect Competition in the Product Market
        7. 6.3.7. Multi-Homing Consumers: Competition for Advertisers
        8. 6.3.8. Limits on Ownership Concentration and Media Bias
        9. 6.3.9. Empirical Evidence
      6. 6.4. Merger Control in Media Markets (1/3)
      7. 6.4. Merger Control in Media Markets (2/3)
      8. 6.4. Merger Control in Media Markets (3/3)
        1. 6.4.1. The Method Used by Antitrust Authorities
          1. 6.4.1.1. The Traditional Approach
          2. 6.4.1.2. An Extension to a Two-Sided Market
        2. 6.4.2. The Possible Price Effect of Media Mergers
          1. 6.4.2.1. Merger Control: Some Examples
            1. 6.4.2.1.1. A One-Sided Market Approach
            2. 6.4.2.1.2. A Two-Sided Market Approach
          2. 6.4.2.2. Empirical Studies
        3. 6.4.3. The Possible Non-Price Effect of Media Mergers
      9. 6.5. Concluding Remarks
      10. Acknowledgments
      11. References
  12. Part II: Sectors
    1. Chapter 7: The Economics of Television and Online Video Markets
      1. 7.1. Introduction
      2. 7.2. The Television Industry (1/5)
      3. 7.2. The Television Industry (2/5)
      4. 7.2. The Television Industry (3/5)
      5. 7.2. The Television Industry (4/5)
      6. 7.2. The Television Industry (5/5)
        1. 7.2.1. The Types of Television
          1. 7.2.1.1. Broadcast (Free) Television
            1. 7.2.1.1.1. Public Service Broadcasters
          2. 7.2.1.2. Pay Television
            1. 7.2.1.2.1. Pay TV Distribution
            2. 7.2.1.2.2. Pay TV Program Production (Channels, Networks)
          3. 7.2.1.3. Broadcast (Pay) Television: DTT
        2. 7.2.2. Cross-Platform Television Statistics
      7. 7.3. A Simple Model of the Television Market (1/2)
      8. 7.3. A Simple Model of the Television Market (2/2)
        1. 7.3.1. The Baseline Model
          1. 7.3.1.1. Baseline Results
          2. 7.3.1.2. Oligopoly
          3. 7.3.1.3. Content Choice
        2. 7.3.2. Evaluating the Simple Model
          1. 7.3.2.1. Testable Implications
          2. 7.3.2.2. What Can We Learn?
      9. 7.4. Extensions to the Simple Model: "The Four Bs" (1/4)
      10. 7.4. Extensions to the Simple Model: "The Four Bs" (2/4)
      11. 7.4. Extensions to the Simple Model: "The Four Bs" (3/4)
      12. 7.4. Extensions to the Simple Model: "The Four Bs" (4/4)
        1. 7.4.1. Public Service Broadcasters
          1. 7.4.1.1. The Economic Rationale for PSBs
            1. 7.4.1.1.1. A History of PSBs
            2. 7.4.1.1.2. PSBs as a Response to Market Failure
          2. 7.4.1.2. Effects of PSBs
        2. 7.4.2. Bargaining
          1. 7.4.2.1. Bargaining Theory
          2. 7.4.2.2. Bargaining Empirics
        3. 7.4.3. Barriers to Entry
          1. 7.4.3.1. Market Power in Wholesale (Programming) Markets
          2. 7.4.3.2. Market Power in Retail (Distribution) Markets
          3. 7.4.3.3. Horizontal Merger Review
        4. 7.4.4. Preference Heterogeneity and Bundling
          1. 7.4.4.1. Bundling Theory
          2. 7.4.4.2. Bundling Empirics
          3. 7.4.4.3. Welfare Effects of à la Carte
      13. 7.5. Open Policy Issues in Television Markets (1/2)
      14. 7.5. Open Policy Issues in Television Markets (2/2)
        1. 7.5.1. Wholesale Bundling and Competition in Programming Markets
        2. 7.5.2. Vertical Integration and Foreclosure
          1. 7.5.2.1. Vertical Integration
          2. 7.5.2.2. Policy Responses
          3. 7.5.2.3. Vertical Merger Review
      15. 7.6. Online Video Markets (1/2)
      16. 7.6. Online Video Markets (2/2)
        1. 7.6.1. Online Video Facts
        2. 7.6.2. Net Neutrality and Foreclosure in Online Video Markets
          1. 7.6.2.1. Net Neutrality and Online Video
          2. 7.6.2.2. Foreclosure in Online Video Markets
      17. 7.7. Conclusions
      18. Acknowledgments
      19. References
    2. Chapter 8: Radio
      1. 8.1. Introduction
      2. 8.2. A Brief History of the Radio Industry in the United States (1/2)
      3. 8.2. A Brief History of the Radio Industry in the United States (2/2)
      4. 8.3. Data
      5. 8.4. The Effects of Industry Consolidation on Market Outcomes: Theoretical Considerations
      6. 8.5. Empirical Evidence on the Effects of Ownership Consolidation in Radio (1/4)
      7. 8.5. Empirical Evidence on the Effects of Ownership Consolidation in Radio (2/4)
      8. 8.5. Empirical Evidence on the Effects of Ownership Consolidation in Radio (3/4)
      9. 8.5. Empirical Evidence on the Effects of Ownership Consolidation in Radio (4/4)
        1. 8.5.1. The Effects of Local Market Consolidation on the Advertising Market
        2. 8.5.2. The Effects of Local Market Consolidation on Product Differentiation and Variety
        3. 8.5.3. The Effects of National Consolidation on Listeners and Advertisers
        4. 8.5.4. Economies of Scale and Scope
      10. 8.6. Excess Entry
      11. 8.7. Strategies for Retaining Listeners
      12. 8.8. Non-commercial Radio and the Effects of Competition Between Non-commercial and Commercial Broadcasters
      13. 8.9. Effects of Radio on the Music Industry, and Cultural and Political Outcomes (1/2)
      14. 8.9. Effects of Radio on the Music Industry, and Cultural and Political Outcomes (2/2)
        1. 8.9.1. Politics
        2. 8.9.2. Contemporary Music
      15. 8.10. Conclusions
      16. Acknowledgments
      17. References
    3. Chapter 9: Newspapers and Magazines
      1. 9.1. Introduction
      2. 9.2. An Overview of the Print Media Industry (1/2)
      3. 9.2. An Overview of the Print Media Industry (2/2)
        1. 9.2.1. A Short History of Newspapers
        2. 9.2.2. Partisanship in Print Media
        3. 9.2.3. Newspapers and the Electoral Process
        4. 9.2.4. Stylized Facts on Newspapers and Magazines
        5. 9.2.5. Data Sources
      4. 9.3. Market Structure in Newspapers and Magazines (1/2)
      5. 9.3. Market Structure in Newspapers and Magazines (2/2)
        1. 9.3.1. The Number of Newspapers in a Market
        2. 9.3.2. The Decline of Newspapers
        3. 9.3.3. Economies of Scale in Newspaper Markets
        4. 9.3.4. Newspaper Chains
      6. 9.4. Newspapers and Magazines as Two-Sided Markets (1/2)
      7. 9.4. Newspapers and Magazines as Two-Sided Markets (2/2)
        1. 9.4.1. The Older Literature on Cross-Externalities in Print Media Markets
        2. 9.4.2. The Two-Sided Market Framework
        3. 9.4.3. Pricing Issues in Print Media
      8. 9.5. Advertising in Newspapers and Magazines
        1. 9.5.1. Reader Valuation of Advertising: Theory
        2. 9.5.2. Reader Valuation of Advertising: Empirics
        3. 9.5.3. Multi-Homing
        4. 9.5.4. The Determinants of Advertising Rates
      9. 9.6. Antitrust Issues in Newspapers and Magazines (1/2)
      10. 9.6. Antitrust Issues in Newspapers and Magazines (2/2)
        1. 9.6.1. Mergers
        2. 9.6.2. Newspaper Joint Operating Agreements
        3. 9.6.3. Vertical Price Restrictions
        4. 9.6.4. Cross-Ownership of Newspapers and Other Media
      11. 9.7. Print Media and the Internet
      12. 9.8. Thoughts for Future Research and Conclusions
      13. Acknowledgments
      14. References
    4. Chapter 10: The Economics of Internet Media
      1. 10.1. Introduction
      2. 10.2. Media and Advertising on the Internet: Some Facts (1/2)
      3. 10.2. Media and Advertising on the Internet: Some Facts (2/2)
        1. 10.2.1. Facts About Internet Media Use
        2. 10.2.2. Facts About Internet Advertising
      4. 10.3. Providing Media Content (1/3)
      5. 10.3. Providing Media Content (2/3)
      6. 10.3. Providing Media Content (3/3)
        1. 10.3.1. Internet Media Consumption and Convergence
        2. 10.3.2. Media Platforms as Gatekeepers
        3. 10.3.3. News Aggregators and the Selection of News
        4. 10.3.4. Search Engines and Media Content
        5. 10.3.5. ISPs, Net Neutrality, and Media Content
      7. 10.4. Users Choosing Media Content (1/5)
      8. 10.4. Users Choosing Media Content (2/5)
      9. 10.4. Users Choosing Media Content (3/5)
      10. 10.4. Users Choosing Media Content (4/5)
      11. 10.4. Users Choosing Media Content (5/5)
        1. 10.4.1. Consumer Choice with Multi-Homing and Its Implications on Content
        2. 10.4.2. Search Engines and Search Bias
        3. 10.4.3. Information Spreading on the Internet
      12. 10.5. Media Platforms Matching Advertising to Content (1/4)
      13. 10.5. Media Platforms Matching Advertising to Content (2/4)
      14. 10.5. Media Platforms Matching Advertising to Content (3/4)
      15. 10.5. Media Platforms Matching Advertising to Content (4/4)
        1. 10.5.1. How to Formalize Targeting
        2. 10.5.2. Keyword Advertising
      16. 10.6. Media Platforms Matching Advertising to Users (1/3)
      17. 10.6. Media Platforms Matching Advertising to Users (2/3)
      18. 10.6. Media Platforms Matching Advertising to Users (3/3)
        1. 10.6.1. Tracking and Personalized Offers
        2. 10.6.2. Advertising Congestion and Limited Attention
      19. 10.7. Conclusion
      20. Acknowledgments
      21. References
  13. Index (1/2)
  14. Index (2/2)
  15. Back Cover

Product information

  • Title: Handbook of Media Economics, vol 1A
  • Author(s): Simon P. Anderson, Joel Waldfogel, David Stromberg
  • Release date: January 2016
  • Publisher(s): North Holland
  • ISBN: 9780444627247