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Crawford, Gregory S., and
Ali Yurukoglu. 2012. "The Welfare Effects of Bundling in Multichannel Television Markets."
,
102(2): 643-85.
Show Article Details
DOI: 10.1257/aer.102.2.643
Abstract:We measure how the bundling of television channels affects short-run
welfare. We estimate an industry model of viewership, demand, pricing, bundling, and input-market bargaining using data on ratings, purchases, prices, bundles, and input costs. We conduct simulations of à la carte policies that require distributors to offer individual channels for sale to consumers. We estimate that negotiated input costs rise by 103.0 percent under à la carte. These higher input costs offset consumer benefits from purchasing individual channels. Mean consumer and total surplus change by an estimated — 5.4 to 0.2 percent and — 1.7 to 6.0 percent, respectively. (JEL D12, L11, L51, L82, M31)
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Authors:
Crawford, Gregory S. (U Warwick)
Yurukoglu, Ali (Stanford U)
JEL Classifications:
D12: Consumer Economics: Empirical Analysis
L11: Production, Pricing, and Market Structure; Size Distribution of Firms
L51: Economics of Regulation
L82: Entertainment; Media
M31: Marketing
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