Handbook of Media Economics, vol 1A

structures are restricted to MHAs together with either SHC or MHC. The former we

have already described, and it involves rational anticipation of monopoly ad levels.

The MHA–MHC equilibrium is the most intricate. One result (as follows from Foot-

note

45 above) is that there can be no symmetric equilibria even though the model is sym-

metric. Asymmetries are somewhat to be expected given that the vertical differentiation

model gives rise to asymmetric quality choices in its standard incarnation (e.g.,

Shaked and

Sutton, 1983

). These results above are analogous to those for the case of the model of

Gabszewicz and Wauthy (2004) for bilateral positive participation externalities.

The insight that the interaction between multi-homing and vertical differentiation ...