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Media Concentration With Free Entry

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  • Guillaume Roger

Abstract

This study develops a free-entry model of competition between media firms, characterizes its equilibrium, and establishes that the industry displays a natural tendency to concentrate. A merger of any 2 firms is strictly profit increasing. Therefore, incentives to consolidate, while maintaining distinct, costly locations (i.e., production units or content), exist. This study distinguishes between post-entry and ex ante consolidation and investigates the properties of the post-consolidation equilibrium. Some firms not involved in any merger may be forced to exit. So, although media mergers may not result in shutting down any of the merging outlets, they still may indirectly affect diversity.

Suggested Citation

  • Guillaume Roger, 2009. "Media Concentration With Free Entry," Journal of Media Economics, Taylor & Francis Journals, vol. 22(3), pages 134-163.
    • Handle: RePEc:taf:jmedec:v:22:y:2009:i:3:p:134-163
    DOI: 10.1080/08997760903129366
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    References listed on IDEAS

    as
    1. Guillaume Roger, 2017. "Two-sided competition with vertical differentiation," Journal of Economics, Springer, vol. 120(3), pages 193-217, April.
    2. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, April.
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    Cited by:

    1. Garcia Pires, Armando J., 2014. "Media diversity, advertising, and adaptation of news to readers’ political preferences," Information Economics and Policy, Elsevier, vol. 28(C), pages 28-38.
    2. Armando J. Garcia Pires, 2017. "Media pluralism and competition," European Journal of Law and Economics, Springer, vol. 43(2), pages 255-283, April.
    3. Armando J. Garcia Pires, 2013. "Media Plurality and the Intensity of Readers' Political Preferences," Journal of Media Economics, Taylor & Francis Journals, vol. 26(1), pages 41-55, March.
    4. Armando J. Garcia Pires, 2021. "Net neutrality and content provision," Manchester School, University of Manchester, vol. 89(6), pages 569-593, December.

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