The Role of Online Platforms for Media Markets – Two‐Dimensional Spatial Competition in a Two‐Sided Market

von Ehrlich, Maximilian; Greiner, Tanja (2013). The Role of Online Platforms for Media Markets – Two‐Dimensional Spatial Competition in a Two‐Sided Market. International Journal of Industrial Organization, 31(6), pp. 723-737. Elsevier 10.1016/j.ijindorg.2013.05.003

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We analyze the market for online and offline media in a model of two-dimensional spatial competition where media outlets sell content and advertising space. Consumer preferences are distributed along the style and type of news coverage where the distance costs may vary across dimensions. For integrated provision of online and offline platforms we show that entering the online market reduces average profits and may even constitute a prisoner's dilemma. Specialized provision may yield polarization in the style and type dimensions. This is in contrast to the maximum–minimum differentiation result previously established in the literature on multidimensional horizontal competition. We show that maximal differentiation in both dimensions occurs due to the discrete nature of the type dimension and asymmetric advertising markets.

Item Type:

Journal Article (Original Article)

Division/Institute:

03 Faculty of Business, Economics and Social Sciences > Department of Economics
11 Centers of Competence > Center for Regional Economic Development (CRED)

UniBE Contributor:

von Ehrlich, Maximilian

Subjects:

300 Social sciences, sociology & anthropology > 330 Economics

ISSN:

0167-7187

Publisher:

Elsevier

Submitter:

Dino Collalti

Date Deposited:

06 Feb 2014 07:54

Last Modified:

12 Nov 2019 15:10

Publisher DOI:

10.1016/j.ijindorg.2013.05.003

BORIS DOI:

10.7892/boris.40294

URI:

https://boris.unibe.ch/id/eprint/40294

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