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  3. American Economic Journal: Microeconomics
  4. November 2014
  5. Effects of Mergers in Two-Sided Markets: The US Radio Industry

Effects of Mergers in Two-Sided Markets: The US Radio Industry

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Abstract

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).

Citation

Jeziorski, PrzemysŁaw. 2014. "Effects of Mergers in Two-Sided Markets: The US Radio Industry." American Economic Journal: Microeconomics, 6 (4): 35-73. DOI: 10.1257/mic.6.4.35

Additional Materials

JEL Classification

  • G34 Mergers; Acquisitions; Restructuring; Voting; Proxy Contests; Corporate Governance
  • L13 Oligopoly and Other Imperfect Markets
  • L82 Entertainment; Media
  • L88 Industry Studies: Services: Government Policy
  • M37 Advertising
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