Abstract: This paper explores the effects that semi-collusion can have in media markets where firms compete for advertising as well as for readership/audience. Assuming that readers are indifferent towards advertising we show that in a differentiated duopoly where newspapers first collude over advertising levels and than compete in newspaper prices, semi-collusion always benefits readers, as copy prices are lower than under either competition or full collusion. In contrast, advertisers suffer from both semi-collusion and full collusion when compared to competition. Readers, however, may even be better off under full collusion when compared to competition.


Justus Haucap

Düsseldorf Institute for Competition Economics (DICE)


20.07.2006 | 16:00-17:30


ZEW, L 7,1 D-68161 Mannheim