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).
"Effects of Mergers in Two-Sided Markets: The US Radio Industry."
American Economic Journal: Microeconomics,
Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
Oligopoly and Other Imperfect Markets
Industry Studies: Services: Government Policy