Optimal product variety in radio markets

• 成果类型: Article
• 署名作者: Berry, Steven; Eizenberg, Alon; Waldfogel, Joel
• 署名单位: Yale University; National Bureau of Economic Research; Hebrew University of Jerusalem; Center for Economic & Policy Research (CEPR); University of Minnesota System; University of Minnesota Twin Cities
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12134
• 发表日期: 2016
• 页码: 463-497
• 关键词: moment inequalities; models; COMPETITION; selection; industry; monopoly; mergers; CHOICE; entry

摘要

A vast theoretical literature explores inefficient market structures in free-entry equilibria, and previous empirical work demonstrated that excessive entry may obtain in local radio markets. We extend that literature by relaxing the assumption that stations are symmetric, allowing for endogenous horizontal and (unobserved) vertical station differentiation. We find that, in most broadcasting formats, a social planner who takes into account the welfare of market participants eliminates 50%-60% of the observed stations. In 80%-94.9% of markets where high-quality stations are observed, welfare could be unambiguously improved by converting one such station into low-quality broadcasting, suggesting local overprovision of quality.