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Effects of Mergers in Two-Sided Markets: The US Radio Industry

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  • Przemys?aw Jeziorski

Abstract

This study examines mergers in two-sided markets using a structural supply-and-demand model that employs data from the 1996-2006 merger wave in the U.S. radio industry. In particular, it identities the conflicting incentives for merged firms to exercise market power on both listener and advertiser sides of the market, and disaggregates the effects of mergers into changes in product variety and advertising quantity. Specifically, it finds 0.2% listener welfare increase (+0.3% from increased product variety, and -0.1% from decreased ad quantity) and 21% advertiser welfare decrease (-17% from changes in product variety, and -5% from decreased ad quantity).

Suggested Citation

  • Przemys?aw Jeziorski, 2014. "Effects of Mergers in Two-Sided Markets: The US Radio Industry," American Economic Journal: Microeconomics, American Economic Association, vol. 6(4), pages 35-73, November.
    • Handle: RePEc:aea:aejmic:v:6:y:2014:i:4:p:35-73
    Note: DOI: 10.1257/mic.6.4.35
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    More about this item

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L88 - Industrial Organization - - Industry Studies: Services - - - Government Policy
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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    1. Effects of Mergers in Two-Sided Markets: The US Radio Industry (AEJ:MI 2014) in ReplicationWiki

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