Upstream market foreclosure

This paper investigates how an incumbent monopolistic can weaken potential rivals or deter entry in the output market by manipulating the access of these rivals in the input market. We analyze two polar cases. In the first one, the input market is assumed to be competitive with the input being supplied inelastically. We show that the situation opens the door to entry deterrence. Then, we assume that the input is supplied by a single seller who chooses the input price. In this case we show that entry deterrence can be reached only through merger with the seller of the input.Entry deterrence, Foreclosure, Overinvestment, Bilateral monopoly

A Note on Expanding Networks and Monopoly Pricing

We obtain explicitly the optimal path of prices for a monopolist operating in a network industry during a finite number of periods. We describe this optimal path as a function of network intensity and horizon length and show that the prices are increasing in time and that, for very low network intensity, or very high horizon length, the monopolist will offer the good at zero price in the initial period.

Successive oligopolies and decreasing returns

In this paper, we propose an example of successive oligopolies where the downstream firms share the same decreasing returns technology of the Cobb-Douglas type. We stress the differences between the conclusions obtained under this assumption and those resulting from the traditional example considered in the literature, namely, a constant returns technology.successive oligopolies, vertical integration, technology.

Successive oligopolies and decreasing returns

In this paper we propose an example of successive oligopolies where the downstream firms share the same decreasing returns technology of the Cobb-Douglas type. We stress the differences between the conclusions obtained under this assumption and those resulting from the traditional example considered in the literature, namely, a constant returns technologysuccessive oligopolies, vertical integration, technology

A note on successive oligopolies and vertical mergers

In this paper we analyze how the technology used by downstream firms can influence input and output market prices. We show via an example that both these prices increase under a decreasing returns technology while the countrary holds when the technology is constant.successive oligopolies, vertical integration, technology, foreclosure

Thematic clubs and the supremacy of network externalities

We raise the problem of the minorities survival in the presence of positive network externalities. We rely on the example of thematic clubs to illustrate why and in which circumstances such survival problems might appear, first considering the case of simple network externalities and then the case of cross network externalitiesthematic clubs, network externalities, cross network externalities

The media and advertising : a table of two-sided markets

Media industries are important drivers of popular culture. A large fraction of leisure time is devoted to radio, magazines, newspapers, the Internet, and television (the illustrative example henceforth). Most advertising expenditures are incurred for these media. They are also mainly supported by advertising revenue. Early work stressed possible market failures in program dupplication and catering to the Lowest Common Denominator, indicating lack of cultual diversisty and quality. The business model for most media industries is underscored by advertisers’ demand to reach prospectie customers. This business model has important impllications for performance in the market since viewer sovereignty is indirect. Viewers are attracted by programming, though they dislike the ads it carries, and advertisers want viewers as potential consumers. The two sides are coordinated by broadcasters (or “platforms”) that choose ad levels and program types, and advertising finances the programming. Competition for viewers of the demographics most desired by advertisers implies that programming choices will be biased towards the tastes of those with such demographics. The ability to use subscription pricing may help improve performance by catering to the tastes of those otherwise under-represented, though higher full prices tend to favor broadcasters at the expense of viewers and advertisers. If advertising demand is weak, program equilibrium porgram selection may be too extreme as broadcasters strive to avoid ruinous subscription price competition, but strong advertising demand may lead to strong competition for viewers and hence minimum differentiation (“la pensée unique”). Markets (such as newspapers) with a high proportion of ad-lovers may be served only by monopoly due to a circulation spiral : advertisers want to place ads in the paper with most readers, but readers want to buy the paper with more ads.Advertising finance; two-sided markets; platform competition

To acquire or to compete ? An entry dilemna

In this paper we address the following question : is it more profitable, for an entrant in a differentiated market, to acquire an existing firm than to compete ? We illustrate the answer by considering competition in the banking sectorvertical differentiation; entry; banking competition

The TV news scheduling game when the newscaster’s face matters

The present note first provides an alternative formulation of the Cancian, Bills and Bergström (1995) - problem which discards the non-existence difficulty and consequently allows to consider some extensions of the TV-newscast scheduling game. The extension we consider consists in assuming that viewers’ preferences between the competing channels do not depend only on the timing of their broadcast, but also on some other characteristics, like the content of the show or the identity of the newscaster. Then we identify a sufficient condition on the dispersion of these preferences over the viewers’ population guaranteeing the existence of a unique Nash equilibrium. It turns out that, at this equilibrium, both networks broadcast their news at the same instant.advertising; newspaper quality

Advertising and the rise of the free daily newspapers

We analyze the competition between two newspapers in a vertical differentiation model where the qualities of the journals are determined endogenously in the first stage of the game. We show that when the advertising revenues per reader increase there is a critical value above which the quality of the low quality newspaper discontinuously falls while it become similtaneously a free newspaper. This is beneficial to the high quality journal and detrimental to the readers.Advertising, Newspaper quality