spatial competition in the network television industry we present an empirical study of spatial competition and a methodology to estimate demand for products with unobservable characteristics using panel data we estimate a discrete choice model with latent product attributes and unobserved heterogeneous consumer preferences our application of the methodology to the network television industry yields estimates that are consistent with experts views given our estimates we compute nash equilibria of a product location game and find that firms observed strategies such as the degree of product differentiation are generally optimal discrepancies between actual and optimal strategies reflect the networks adherence to rules of thumb and possible bounded rationality behavior copyright 2001 by the rand corporation

purchase bidding strategies of an energy coalition with demand response capabilities the implementation of demand response programs drp has gained interest as a means to alleviate energy consumption during peak hours two explanations account for the success of such programs which involve both utilities and electricity consumers with the latter often organized into coalitions the system operator meets its goal of reducing the load peak simultaneously electricity consumers achieve economic benefits when reducing consumption during peak hours in this paper a monte carlo based algorithm has been proposed for the formulation of multiple purchase offers in the day ahead energy market daem by coalitions in which consumers vary in their sensitivity to drp manifesting different responsiveness to hourly tariffs based on the hourly market clearing prices being able to monitor how coalition members use air conditioning in the presence of variable hourly energy tariffs the coordinator can then define a purchase bidding strategy depending on how price sensitive the coalition is simulation results show that the presence of a price sensitive demand leads not only to a subsequent reduction in energy prices during peak hours but also leads to a decrease in their inter hour volatility

technological migration the case of thai digital terrestrial television this study analyzes the business strategies of entrepreneurs during a technological transition the particular technological transition is the switch from analogue to digital tv in thailand the estimated net present values of the broadcasting operators net profit over a 15 yearlicense period indicate that a long transition period reduces the benefit from upgradingto a better technology the incumbents would like to join the technological migration fromday one the faster the transition process the higher the new platform is worth in presentvalue the government should terminate the old platform as soon as possible and stimulatea rapid transition keywords technological migration digital television net present value jel classification m21 m38 o33

competition for advertisers and for viewers in media markets standard models of advertising financed media assume consumers patronise a single media platform precluding effective competition for advertisers such competition ensues if consumers multi home the principle of incremental pricing implies that multi homing consumers are less valuable to platforms then entry of new platforms decreases advertisement prices while a merger increases them and advertisement financed platforms may suffer if a public broadcaster carries advertisements platforms may bias content against multi homing consumers especially if consumers highly value overlapping content and or second impressions have low value

demand side bidding agents modeling and simulation problems such as price volatility have been observed in electric power markets demand side participation is frequently offered as a potential solution by promising to increase market efficiency when hockey stick type offer curves are present however the individual end consumer will surely value electricity differently which makes demand side participation difficult as a group and at a bus in this paper demand is categorized into two groups one that highly values reliability and one that does not the two types are modeled separately and a new optimal bidding function is developed and tested based on this model

markets under price controls in partial and general equilibrium abstract when parallel markets arise in the face of price or other controls two aspects of agents behavior become crucial in analyzing market outcomes first sellers risk will rise with increases in illegal sales but may also fall with increases in legal sales if the latter is true the parallel market price will induce higher output second if consumers can be given access to the price controlled good without incurring search queuing and other transaction costs due to rationing production of the controlled good will be higher these effects are demonstrated in both partial and general equilibrium

research on the motion picture industry state of the art and new directions off the beaten track away from theatrical release the motion picture industry has been subject of extensive academic research over the last decades however most scholars focused on the u s theatrical motion picture market the number of research activities regarding even more profitable release windows such as home video or television has been substantially lower although international distribution is essential for a motion picture project to break even there has been little significant re search on most other markets this paper aims at summarizing the current state of research on the motion picture industry particularly from marketing and management perspective revealing research gaps and proposing recommendations for future research endeavors therefore a three pillar scheme is developed to systemize previous findings research on intraorganizational decision making contractual relationships between national stakeholders and international market competition are differentiated since these insights are mainly derived from u s theatrical exhibition they can hardly be applied to other markets and exhibition windows thus potential research areas are identified to expand knowledge of posttheatrical and international markets

content vs advertising the impact of competition on media firm strategy media firms compete in two connected markets they face rivalry for the sale of content to consumers and at the same time they compete for advertisers seeking access to the attention of these consumers we explore the implications of such two sided competition on the actions and source of profits of media firms one main conclusion we reach is that media firms may charge higher content prices in a duopoly than in a monopoly this happens because competition for advertisers can reduce the return per customer impression from the ad market making each firm less willing to underprice content to increase demand greater competitive intensity may thus increase content profits and decrease ad profits these findings are in sharp contrast to those in a regular one sided product market in which competition typically lowers product prices and profits we extend the framework to examine competition across different media e g between magazines and cable tv and show that firms in a duopolistic medium may benefit from more intense competition from a monopolist in another medium we characterize the conditions for each firm in the duopoly medium to bundle more ads and earn greater total profits than the rival firm in the monopoly medium

network competition and interconnection with heterogeneous subscribers abstract this paper analyses two way access pricing in a telecommunications market where consumers are heterogeneous in their demand for calls and firms are allowed to use non linear tariffs we first investigate how the presence of access charges affects the tariffs offered by firms in symmetric equilibrium next we show that under certain conditions each firm s profit is independent of the level of reciprocal access charge and therefore collusion using access charges is not sustainable this result suggests that efficient call allocations can be achieved under a minimal regulatory intervention i e recommending firms set access charges equal to call termination cost

concentration and public policies in the broadcasting industry the future of television tv regulation concentration and public policies in the broadcasting industry new technologies are deeply transforming the broadcasting industry what we have seen so far is only the beginning of a long story inevitably industry regulations must adapt which means that a wide ranging rethink of current practices is required in order to assess the likely evolution of the industry this article decomposes it into a number of components from conception of programmes to their broadcasting including distribution storage and licensing contrary to popular expectations the analysis suggests that the current high degree of concentration will if anything increase the policy implication is that regulation so far driven by now obsolete technological constraints should increasingly emphasize promoting competition massimo motta and michele polo

two sided markets with pecuniary and participation externalities the existing literature on two sided markets addresses participation externalities but so far it has neglected pecuniary externalities between competing platforms in this paper we build a model that incorporates both externalities in our setup differentiated platforms compete in advertising and offer consumers a service free of charge such as a tv program that is financed through advertising we show that advertising can exhibit the properties of a strategic substitute or complement surprisingly there exist cases in which platforms benefit from market entry moreover we show that from a welfare point of view perfect competition is not always desirable

platform competition in two sided markets many if not most markets with network externalities are two sided to succeed platforms in industries such as software portals and media payment systems and the internet must get both sides of the market on board accordingly platforms devote much attention to their business model that is to how they court each side while making money overall this paper builds a model of platform competition with two sided markets it unveils the determinants of price allocation and end user surplus for different governance structures profit maximizing platforms and not for profit joint undertakings and compares the outcomes with those under an integrated monopolist and a ramsey planner jel l5 l82 l86 l96

women s participation in local organizations conditions and constraints abstract civic organizations have a capacity to contribute to economic growth and an equitable distribution of welfare by reducing information asymmetries and transaction costs while donors increasingly recognize that group based projects are a means to advocate organizational capacities of target groups it is not clear whether group based organizations always increase efficiency and equity this article analyses the determinants of participation in local development groups ldgs using data from two projects funded by undp in kashmir and gtz in chad a major result of the empirical analysis is the identification of a middle class effect of participation the exclusion of the majority of the poor can be explained by high opportunity costs to join the group especially for income earning women in addition it can be shown that an existing social network is a pre condition for participation finally the assumption has been confirmed that bargaining power of the members is important for their decision to participate in groups

cast demographics unobserved segments and heterogeneous switching costs in a television viewing choice model abstract an accurate television viewing choice model is an important tool for television executives and advertisers the authors present a new viewing choice model which differs from the traditional rust alpert model in three ways 1 it introduces a new show characteristic the demographic characteristics of a show s cast 2 it allows the preferences over the traditional show categories to be a function of both observable and unobservable individual characteristics and 3 it allows the cost of switching among the viewing alternatives to vary across show types and individual characteristics cross validated predictive testing shows that this model fits the data better than the rust alpert model does furthermore the authors demonstrate that network executives can improve ratings by using this model the authors predict that by following their scheduling strategies in particular by broadcasting comedies after 10 00 p m abc cbs and nbc could have increased their average ratings by 12 9 7 5

market provision of broadcasting a welfare analysis this paper presents a theory of the market provision of broadcasting and uses it to address the nature of market failure in the industry advertising levels may be too low or too high depending on the nuisance cost to viewers the substitutability of programs and the expected benefits to advertisers from contacting viewers market provision may allocate too few or too many resources to programming and these resources may be used to produce programs of the wrong type monopoly ownership may produce higher social surplus than competitive ownership and the ability to price programming may reduce social surplus

sequential location games we study location games where market entry is costly and occurs sequentially and where consumers are nonuniformly distributed over the unit interval we show that for certain classes of densities including monotone and under some additional restrictions hump shaped and u shaped ones equilibrium locations can be determined independently of when they are occupied our analysis reveals a number of peculiarities of the uniform distribution extensions of the model allow for price competition and advertisement in media markets winner take all competition trade offs between profits in the short and the long run and firms operating multiple outlets

tv wars exclusive content and platform competition in pay tv the article examines incentives for exclusive distribution of premium television programming static analysis shows that a vertically integrated operator with premium programming always supplies this content to the rival distributor using per subscriber fees to soften competition in a dynamic setting with switching costs exclusivity confers a market share advantage benefiting the operator in the future under certain conditions this future benefit outweighs the opportunity cost of forgone wholesale fees making exclusivity the preferred choice alternative dynamic mechanisms are explored identifying essential features the analysis explains the observed incidence of content exclusivity in pay tv and provides guidance for policy makers

strategies to fight ad sponsored rivals we analyze the optimal strategy of a high quality incumbent that faces a low quality ad sponsored competitor in addition to competing through adjustments of tactical variables such as price or the number of ads a product carries we allow the incumbent to consider changes in its business model we consider four alternative business models a subscription based model an ad sponsored model a mixed model in which the incumbent offers a product that is both subscription based and ad sponsored and a dual model in which the incumbent offers two products one based on the ad sponsored model and the other based on the mixed business model we show that the optimal response to an ad sponsored rival often entails business model reconfigurations we also find that when there is an ad sponsored entrant the incumbent is more likely to prefer to compete through the subscription based or the ad sponsored model rather than the mixed or the dual model because of cannibalization and endogenous vertical differentiation concerns we discuss how our study helps improve our understanding of notions of strategy business model and tactics in the field of strategy

informative advertising with differentiated products in this paper we study the role of promotional expenditures by sellers in a model of product differentiation advertising conveys full and accurate information about the characteristics of products heterogeneous consumers who have no source of information other than advertisements seek to purchase the products that best fit their needs despite the roles played by advertising in improving the matching of products and consumers and in increasing the elasticity of demand faced by each firm we find that the market determined levels of advertising are excessive given the extent of diversity in the market we derive a promotional equilibrium based on a specific information transmission technology paying explicit attention to the structure of consumer information and its impact on firms demand curves this allows us to study the effects of changes in the advertising technology including an increased ability to target messages to specific groups of consumers on the equilibrium in the product market we find that decreased advertising costs may reduce profits by increasing the severity of price competition

quantity restrictions on advertising commercial media bias and welfare abstract we study the welfare effect of a quantity restriction on advertising in free to air television and other advertising financed media in the presence of commercial media bias broadcasters face a trade off between increasing the number of viewers by sending content that is highly valued by viewers and increasing the price of advertising by choosing advertiser friendly content a cap on advertising drives the per viewer price of ads up thus content improves for viewers therefore the cap can be welfare enhancing even when viewers are not ad averse competition among broadcasters makes it more likely that a cap on advertising improves welfare thus there is a complementarity between regulation and competition on this market we also show that a tax on advertising revenues has quite different effects than a cap on advertising quantity

benefits and challenges of electrical demand response a critical review advances in it control and forecasting capabilities have made demand response a viable and potentially attractive option to increase power system flexibility this paper presents a critical review of the literature in the field of demand response providing an overview of the benefits and challenges of demand response these benefits include the ability to balance fluctuations in renewable generation and consequently facilitate higher penetrations of renewable resources on the power system an increase in economic efficiency through the implementation of real time pricing and a reduction in generation capacity requirements nevertheless demand response is not without its challenges the key challenges for demand response centre around establishing reliable control strategies and market frameworks so that the demand response resource can be used optimally one of the greatest challenges for demand response is the lack of experience and the consequent need to employ extensive assumptions when modelling and evaluating this resource this paper concludes with an examination of these assumptions which range from assuming a fixed linear price demand relationship for price responsive demand to modelling the highly diverse distributed and uncertain demand response resource as a single centralised negative generator adopting fixed characteristics and constraints

concentration and self censorship in commercial media within a simple model of non localized hotelling type competition among arbitrary numbers of media outlets we characterize quality and content of media under dierent ownership structures assuming advertising sponsored prot maximizing outlets we show that i topics sensitive to advertisers can be underreported self censored by all outlets in the market ii self censorship increases with the concentration of ownership iii adding outlets while keeping the number of owners xed may even increase self censorship the latter result relies on consumers most preferred outlets being potentially owned by the same media companies we argue that externalities resulting from self censorship could be empirically large

chicken and egg competition among intermediation service providers we analyze a model of imperfect price competition between intermediation service providers we insist on features that are relevant for informational intermediation via the internet the presence of indirect network externalities the possibility of using the nonexclusive services of several intermediaries and the widespread practice of price discrimination based on users identity and on usage efficient market structures emerge in equilibrium as well as some specific form of inefficient structures intermediaries have incentives to propose non exclusive services as this moderates competition and allows them to exert market power we analyze in detail the pricing and business strategies followed by intermediation services providers copyright 2003 by the rand corporation

a reply to a comment on is having more channels really better a model of competition among commercial television broadcasters liu et al liu y d s putler c b weinberg 2004 is having more channels really better a model of competition among commercial television broadcasters marketing sci 23 1 120 133 examine the television broadcast industry using a model in which profit maximizing broadcasters seek to gain viewers by choosing the type of program to offer and by spending money to set program quality allowing broadcasters to sell access to those viewers through inserted advertisements at a fixed rate per viewer wu and chou wu c s chou 2006 commentary on is having more channels really better a model of competition among commercial television broadcasters marketing sci 25 5 541 545 argue that the duopoly result for a certain range of the cost parameter in liu et al is not a pure strategy nash equilibrium they further propose some modifications to the original model to restore liu et al s results in this reply we demonstrate how a single strategy not included in the strategy space of the liu et al duopoly model leads to the difference between our analysis and that of wu and chou while we had intended to rule out this strategy the text was not entirely clear on this issue wu and chou s comment provides an opportunity to clarify the situation we provide both empirical and theoretical support for excluding this strategy which allows us to focus on the more plausible competitive situations in television broadcasting we also reply to wu and chou s other comments on several issues such as the relative importance of program type versus quality

time scarcity and the market for news abstract we develop a theory of news coverage in environments of information abundance time constrained consumers browse through news items across competing outlets they choose which outlets to access and which stories to read or skip thus indirectly deciding how much time to spend on a given outlet firms decide on rankings of news items that maximize their profits we show that even when readers or television viewers and firms are rational and unbiased they spend more time on the news than they would like and not necessarily on the topics they prefer in particular relevant news items may be crowded out we then study how reader efficient standards can be restored and derive implications on diverse aspects of new and traditional media these include tabloidization and polarization of the news and other aspects relevant for the political economy of the media including political knowledge gaps and voter turnout

a comment on is having more channels really better a model of competition among commercial television broadcasters this paper shows that the analysis of liu et al 2004 contains a substantive error the asserted pure strategy nash equilibrium leading to their theorems 1 and 2 is really not an equilibrium we show that in their model either pure strategy nash equilibria do not exist or unlike their asserted main result when a pure strategy equilibrium exists increasing the number of commercial television broadcasters does not result in lower quality programs possible modifications of liu et al s model that may help restore the desired result are discussed

negotiations and exclusivity contracts for advertising exclusive advertising on a given media outlet is usually profitable for an advertiser because consumers are less aware of competing products however for such arrangements to exist media must benefit as well we examine conditions under which such exclusive advertising contracts benefit both advertisers and media outlets referred to as stations by illustrating that exclusive equilibria arise in a theoretical model of the media advertisers and consumers who participate in both the product and media markets in the model stations sell advertising space to advertisers and broadcast advertising messages to consumers conditions leading to higher equilibrium levels of advertising can be unprofitable for advertisers because high levels of advertising make consumers better informed and thus lead to fiercer product price competition as a result media stations may be less profitable as well because their payoff is determined as a fraction of the advertiser surplus generated in the product market stations mitigate this effect by offering advertisers exclusive advertising contracts with such contracts consumers are less informed about competing products yielding higher producer surplus it is profitable for stations to offer exclusivity when commercial advertising is an important means for advertisers to inform consumers about their products

television in a digital age what role for public service broadcasting public service broadcasting the television broadcasting industry is subject to an exceptionally high level of public intervention but one of the reasons for this the absence of competition is fast disappearing as households become multi channel this paper is concerned with whether a case for public service broadcasting remains and if so what form it should take there are several other potential sources of market failure but a lack of evidence often makes judging their practical significance difficult to help overcome this problem and provide the basis for improved public accountability the paper proposes several measures of public service broadcasting performance the paper also considers when the appropriate remedy for these failures might take the form of dedicated public service broadcasters like the bbc rai ard france 2 etc it suggests that in general targeted supply side interventions of this sort only make sense when they address a supply side failure and that dedicated public service broadcasters are to be preferred to alternative types of targeted intervention like an arts council of the air on contractual grounds shaun p hargreaves heap

free entry and social inefficiency our goal is to provide a simple yet general exposition of the conditions under which the number of entrants in a free entry equilibrium is excessive insufficient or optimal our analysis compares the number of firms that enter a market when there is free entry with the number that would be desired by a social planner who is unable to control the behavior of firms once they are in the market that is we consider the second best problem of choosing the welfare maximizing number of firms while we take as given their noncompetitive behavior after entry we demonstrate that the crucial conditions for establishing the presence of an entry bias can be stated quite simply in terms of the outcome of the postentry game played by entrants in contrast to previous work we do not need to model this postentry game explicitly

press advertising and the ascent of the pensee unique the press industry depends in a crucial way on the possibility of financing an important fraction of its activities by advertising receipts we show that this induces the editors of newspapers to moderate in several cases the political message they display to their readers compared with the political opinions they would have expressed otherwise to this end we consider a three stage game in which editors select sequentially their political image the price of their newspaper and the advertising tariff they oppose to the advertisers the intuition of the result lies in the fact that editors have to sell tasteless political messages to their readers in order to sell a larger audience to the advertisers

a simple theory of advertising as a good or bad our analysis treats advertisements and the goods advertised as complements in stable metautility functions and generates new results for advertising by building on and extending the general analysis of complements by assimilating the theory of advertising into the theory of complements we avoid the special approaches to advertising found in many studies that place obstacles in the way of understanding the effects of advertising we also use this approach to evaluate advertising from a welfare perspective whether there is excessive or too little advertising depends on several variables the effects on consumer utility the degree of competition in the market for advertised goods the induced changes in prices and outputs of advertised goods and whether advertising is sold to consumers

competition between networks a study of the market for yellow pages this paper estimates the importance of network effects in the market for yellow pages i estimate three simultaneous equations consumer demand for usage of a directory advertiser demand for advertising and a publisher s first order condition derived from profit maximizing behaviour estimation shows that advertisers value consumer usage and that consumers value advertising implying a network effect i find that internalizing network effects would significantly increase surplus as an application i consider whether the market benefits from monopoly which takes advantage of network effects or oligopoly which reduces market power i find that a more competitive market is preferable copyright 2004 wiley blackwell

the role of online platforms for media markets two dimensional spatial competition in a two sided market abstract we analyze the market for online and offline media in a model of two dimensional spatial competition where media outlets sell content and advertising space consumer preferences are distributed along the style and type of news coverage where the distance costs may vary across dimensions for integrated provision of online and offline platforms we show that entering the online market reduces average profits and may even constitute a prisoner s dilemma specialized provision may yield polarization in the style and type dimensions this is in contrast to the maximum minimum differentiation result previously established in the literature on multidimensional horizontal competition we show that maximal differentiation in both dimensions occurs due to the discrete nature of the type dimension and asymmetric advertising markets

efficiency enhancing taxation in two sided markets this paper examines the efficient provision of goods in two sided markets and characterizes optimal specific and ad valorem taxes we show that i a monopoly may have too high output compared to the social optimum ii output may be reduced by imposing negative value added taxes subsidy or positive specific taxes

peasant household behaviour with missing markets some paradoxes explained a model of peasant household behavior under varying degrees of household specific food and labor market failures is constructed to show that these structural features can explain several well known patterns of peasant response which have often been attributed to peculiar motives presumed specific to peasants the model explains sluggish response to cash crops prices and high instability in perceived food and labor scarcities the key role of manufactured consumer goods prices in stimulating peasants effort in cash crops production the effectiveness of taxation as opposed to incentives in stimulating cash crops production and the key role of technological change in food production to enhance cash crop production results are obtained analytically in the case of one market failure and by numerical simulation with more than one

mass media and special interest groups abstract media revenues are an important determinant of media behavior it is generally accepted that news coverage depends not only on the preferences of media consumers but also on the preferences of advertisers or subsidizing groups however existing models reach the opposite conclusions about the relationship between the profitability of advertising and media bias we present a theoretical model that reconciles these results the model shows that the sign of the effect of marginal costs of production or marginal advertising revenues on the level of distortion in news coverage depends on complementarity or substitutability between media bias and audience size for an interest group the existence of a budget constraint for an interest group and media outlets reliance on subscription in addition to advertising revenues

tax competition relative performance and policy imitation rather than about their absolute payoffs governments in fiscal competition often seem to care about their performance relative to other governments moreover they often appear to mimic policies observed elsewhere i study such behavior in a standard tax competition game both with relative payoff concerns and for imitative policies evolutionary stability for games with finitely many players is the appropriate solution concept independently of the number of jurisdictions involved an evolutionarily stable tax policy coincides with the competitive outcome of a tax competition game with infinitely many players it thus involves drastic efficiency losses

priority service pricing investment and market organization tingent forward delivery contracts offered by a seller each customer s selection of one contract from the menu determines the customer s service order or priority in each contingency the seller rations supplies by serving customers in order of their selected priorities until the supply is exhausted or all customers are served various forms of priority service are widely

shadow wages and shadow income in farmers labor supply functions this article extends the current literature on estimating the labor supply function in agriculture by providing a different method to derive the shadow wage and shadow income the method is based on the observation that the shadow wage is the marginal product of labor at the optimal point of both farm and household production functions thus under certain assumptions on the functional form of the production functions both the shadow wage and shadow income can be derived without estimating the production function using a sample of vietnamese farmers the results from the new method are shown to be consistent with the theory

the economic effects of federalism and decentralization a cross country assessment this paper explores the idea that institutional details matter and that attempts to estimate the economic effects of federalism by employing a simple dummy variable neglect potentially important institutional details based on a principal component analysis seven aspects of both federalism and decentralization are used as variables for explaining differences in 1 fiscal policy 2 government effectiveness 3 economic productivity and 4 happiness the results show that institutional details do indeed matter different aspects of federalism impact on the outcome variables to different degrees this study adds to our knowledge on the transmission mechanisms of federalism and decentralization

a diffusion model based supply side offer agent worldwide energy markets have been on a path toward deregulation for several decades these markets have proven to be difficult to design and run because of their repetitive nature and the externalities provided by reliable grid operation in a deregulated market environment our experiments suggest that market participants will pursue their own profit maximizing objective rather than use an objective that reflects social benefit multiagent simulation is useful for gaining insights into market participant behavior under various rules in this way market rules can be tested for efficacy and efficiency in this paper an agent based on a double layer diffusion model developed elsewhere is tested and its effectiveness reported

assessment and simulation of the responsive demand potential in end user facilities application to a university customer many problems have appeared with the practical implementation of restructured electrical business in the u s and european union such as lack of generation network constraints etc a good example of these problems is the scarce participation of the demand in the electricity markets energy reserve and other ancillary services problems that could be solved through new demand responsive programs aimed to replace the traditional demand side management programs into voluntary demand participation programs a methodology for the generation of demand side bids and offers in large customer facilities and a real application to a university customer is presented in this paper the methodology is based on the knowledge of the physical processes involved in the electricity consumption and on the flexibility of the required supply the result of the methodology proposed is a set of demand packages that can be used to participate in different electricity markets whose possibilities in the market arena will be explored in a consequent paper

a bilevel model for electricity retailers participation in a demand response market environment abstract demand response programmes are seen as one of the contributing solutions to the challenges posed to power systems by the large scale integration of renewable power sources mostly due to their intermittent and stochastic nature among demand response programmes real time pricing schemes for small consumers are believed to have significant potential for peak shaving and load shifting thus relieving the power system while reducing costs and risk for energy retailers this paper proposes a game theoretical model accounting for the stackelberg relationship between retailers leaders and consumers followers in a dynamic price environment both players in the game solve an economic optimisation problem subject to stochasticity in prices weather related variables and must serve load the model allows the determination of the dynamic price signal delivering maximum retailer profit and the optimal load pattern for consumers under this pricing the bilevel programme is reformulated as a single level milp which can be solved using commercial off the shelf optimisation software in an illustrative example we simulate and compare the dynamic pricing scheme with fixed and time of use pricing we find that the dynamic pricing scheme is the most effective in achieving load shifting thus reducing retailer costs for energy procurement and regulation in the wholesale market additionally the redistribution of the saved costs between retailers and consumers is investigated showing that real time pricing is less convenient than fixed and time of use price for consumers this implies that careful design of the retail market is needed finally we carry out a sensitivity analysis to analyse the effect of different levels of consumer flexibility

is having more channels really better a model of competition among commercial television broadcasters competitive behavior in commercial television broadcasting is modeled to examine program choice and the effects of more channels being available on firm strategy specifically broadcasters compete by selecting both the type and quality level of a program to offer but do not compete on price we obtain five major results first a comparison of monopoly and duopoly markets indicates that broadcasters in an industry with a larger number of competitors may provide programs of lower quality compared to broadcasters in an industry with a smaller number second in terms of viewer welfare having more channels available is not necessarily better third broadcasters tend to choose an intermediate level of differentiation in terms of the types of programs they provide resulting in a counterprogramming strategy in other words avoidance of price competition is not required for competitors to differentiate themselves from each other fourth if one broadcaster starts the evening with a higher quality higher rated program than its competitor its second program should also be of higher quality finally a broadcaster s first program should be of equal or higher quality than its second program put another way it always behooves a broadcaster to lead with its best

network or pay per view a welfare analysis the welfare effects of pay per view television and advertising supported networks are compared it is shown that pay per view television admits third degree price discrimination and may involve a large loss of consumer surplus

optimal planning to include storage devices in power systems it is difficult to forecast renewable energy resources due to their variability high uncertainty of the resources increases the concern about the reliable operation of the electric power system storage devices have been considered a candidate to control variable energy resources and most studies on storage devices are performed in the economic dispatch therefore electric power adequacy may be an issue in this paper a new approach in the optimal power flow framework is proposed for deploying storage devices and the feasibility and economic impact analyses are discussed

the willingness to pay for job amenities evidence from mothers return to work the author examines the extent to which mothers are willing to trade wages for non wage job attributes within the context of maternity leave the key aspect of this framework is that mothers can decide whether and when to return to their guaranteed job in contrast to previous studies that analyze the job search of employed workers in this framework one does not need to observe the wage amenity offer process it is the first study of its kind to estimate mothers marginal willingness to pay mwp for job amenities directly the author derives the mwp for job amenities from duration data and uses data from the german socio economic panel and the qualification and career survey to estimate mothers leave length decisions by a discrete duration method the mwp for amenities is inferred through the estimated response of the leave length with respect to the amenities and the wage results indicate that mothers are willing to sacrifice a significant fraction of their wage to reduce hazards and to enjoy a flexi

differentiation with user generated content this paper studies competition between firms whose products content are generated by their customers users video sharing sites social networks online games etc all rely heavily on user generated content and have been growing significantly in the last decade we model a hotelling style market in which consumers have heterogeneous tastes along a circular city in a first step we consider two ex ante identical firms whose offerings entirely depend on user generated content consumers contribute content to the firm they join and benefit from the content provided by the others their valuation being higher the closer the content contributor is to the content consumer i e there are local network effects in such a setting we show that ex ante identical firms can acquire differentiated market positions that spontaneously emerge from user generated content moreover such differentiation may take interesting patterns wherein a firm simultaneously attracts multiple distinct consumer segments that are isolated from each other greater segregation measured by the number of disjoint segments in each platform reduces consumer valuation for content but interestingly it intensifies firm competition we show that this insight can help us refine the set of possible equilibria in a second step we consider firms that explicitly differentiate their offerings by generating some content on their own we show that user generated content may strengthen or defeat firms intended positioning i e firms attract consumers located opposite to their chosen positions and consumer surplus may be higher in the latter case finally we allow multihoming by consumers and show that the previous equilibrium patterns remain valid but in most equilibria a subset of consumers located between rival firms core clienteles are multihomers more multihoming consumers imply reduced differentiation and higher degree of platform competition we relate these findings to anecdotal evidence and explore their strategic implications for competing firms relying on user generated content this paper was accepted by j miguel villas boas marketing

two sided markets a progress report the paper provides a road map to the burgeoning literature on two sided markets and presents new results it identifies two sided markets with markets in which the structure and not only the level of prices charged by platforms matters the failure of the coase theorem is necessary but not sufficient for two sidedness the paper builds a model integrating usage and membership externalities that unifies two hitherto disparate strands of the literature emphasizing either form of externality and obtains new results on the mix of membership and usage charges when price setting or bargaining determine payments between end users

optimal auction design in two sided markets a key feature of online markets for advertising e g sponsored links is that clicking rates depend on the searchers expectations that the platform selects relevant advertisers this article studies auction design by a platform that maximizes profits in the long run where clicking rates are mechanism dependent in line with the practice of the major search engines the revenue maximizing mechanism is a scoring auction that combines the willingness to pay and the relevance to searchers of advertisers by trading off rent extraction and clicking volume this mechanism works as a cross subsidization device between searchers and advertisers

purchase allocation and demand bidding in electric power markets the purchase allocation problem is one of the most important problems faced by an electric energy service provider under new market environments the optimal purchase allocation problem for dual electric power markets and demand bid generation are discussed in this paper the price volatility is explicitly considered in purchase allocation problems and the sequential nature is modeled by conditional stochastic characteristics an analytical solution for the optimal allocation is derived with given demand and statistical characteristics of the market prices the method for generating demand bids for purchaser based on market allocation and price forecasting is then developed the numerical simulations for market allocation and bid generation are demonstrated based on the actual data of the u s california power market

selective reporting of factual content by commercial media the authors study the market for factual content and examine whether competition increases or decreases its provision factual content is supplied by commercial media firms which observe a set of facts depicting the state of the world and selectively decide how to report them consumers value content that matches their opinion which incentivizes media firms to slant their reports by omitting certain facts novel features in the authors model include consumers ability to anticipate the media s incentives for slant and the requirement that all media stances must be supported by facts furthermore consumers find reports with more facts to be more convincing despite consumers ability to detect slant and their demand for factual support the research shows that competition results in consumers reading fewer facts and being unable to update their prior beliefs about the state of the world the authors also find that a monopoly medium may be more polarizing than competitive media and that polarized report

fragmented duopoly theory and applications to backward agriculture abstract the central aim of this paper is to provide a formal description of the idea of market fragmentation which is so widely used to describe markets in backward agriculture we begin by describing a fragmented duopoly in which each seller has a captive set of customers and there is a non captive set who may buy from either seller the nash cournot equilibria of the system are analyzed and then the model is generalized to allow for the endogenous determination of the captive sets the subgame perfect equilibrium of the model provides a useful background for studying familiar topics like fragmentation interlinkage and disguised unemployment from a new point of view

food subsidies and poverty alleviation this paper formulates the problem of the optimal pattern of food subsidies in a general setting where the objective is to minimize a class of poverty indices within the framework of the mo dern public finance theory taking explicit account of the budget con straint and preferences and technologies the authors derive rules fo r retargetting food subsidies to reduce poverty many operational rul es of thumb appear as special cases of the general results the analy sis thus provides not only the microfoundations of these operational rules but also their appropriate generalizations when the conditions under which they arise are not fulfilled copyright 1988 by royal economic society

search diversion and platform competition abstract platforms use search diversion in order to trade off total consumer traffic for higher revenues derived by exposing consumers to unsolicited products e g advertising we show that competition between platforms leads to lower equilibrium levels of search diversion relative to a monopoly platform when the intensity of competition is high on the other hand if there is only mild competition then competing platforms induce more search diversion relative to a platform monopolist when platforms charge consumers fixed access fees all equilibrium levels of search diversion under platform competition are equal to the monopoly level irrespective of the nature of competition furthermore relative to platforms that cannot charge such fees platforms that charge positive negative access fees to consumers have weaker stronger incentives to divert search

newspaper differentiation and investments in journalism the role of tax policy many countries levy reduced rate indirect taxes on newspapers with proclaimed policy goals of stimulating investment in journalism and ensuring low newspaper prices however by taking into account the fact that the media industry operates in two sided markets we find the paradoxical result that the consequences of a low tax regime might be quite the opposite we also show that the low tax regime tends to increase newspaper differentiation if the advertising market is relatively small the newspapers might invest too little in journalism and be too differentiated from a social point of view in this case a tax increase will be welfare enhancing

impact of state and civil institutions on the operation of rural market and nonmarket configurations abstract the approach undertaken in this study is based on the concept of configurations configurations are shaped by specific combinations of characteristics of the following elements the item transacted the actors and the underlying physical technological cultural and policy environment configurations can be either market or nonmarket configurations in turn transactions are endogenously determined within given configurations the impact of government intervention on the performance of a number of prototypical rural configurations and agrarian institutions such as the food and cash crops market configurations the farm household sharecropping and the rural official and unofficial credit markets is evaluated critically

equilibrium under price controls with endogenous transactions costs abstract in this paper we present an equilibrium model for an exchange economy with fixed prices and endogenously determined search or transactions costs given the fixed prices endogenously determined equilibrium buying and selling prices which include transactions costs result these costs occur on either the demand or supply side of each market but not both we see an eventual application of this approach to an evaluation of welfare costs of either economy wide wage and price controls or sector specific price controls such as energy in the final section we present some simple numerical examples which illustrate the approach

a semi parametric analysis of two sided markets an application to the local daily newspapers in the usa summary this paper considers an empirical semiparametric model for two sided markets contrary to existing empirical literature on two sided markets we specify network effects and probability distribution functions of net benefits of the two sides nonparametrically we then estimate the model by nonparametric instrumental variables regression for local daily newspapers from the usa we show that semiparametric specification is supported by the data and the network effects are neither linear nor monotonic with a numerical illustration we demonstrate that the mark up of the newspaper on each side changes drastically with the nonlinearly specified network effects from the case with linear network effects copyright 2015 john wiley sons ltd

the impact of targeting technology on advertising markets and media competition an important component of advertising effectiveness is the quality of the match between advertisers and the intended recipients of ads traditionally media have been able to tighten such matches by providing content tailored for specific groups of consumers for example local media outlets attract audiences from their localities ensuring that when local advertis ers place ads they are mostly viewed by their potential customer base recently online adver tising has afforded new technologies that tar get consumers directly rather than indirectly through tailored content a leading example of such targeting is based on geographic loca tion as inferred from ip addresses so while the boston globe may have had an advantage in selling ads to boston advertisers now the new york times can offer boston based ads to consumers located in boston industry specula tion is that such technologies may spur higher demand for online advertising but that these technologies will benefit general outlets more than local newspapers 1 it may be problematic for the future of the local news industry if gen eral outlets gain at their expense to date there has been little analysis on how the market for advertising might be impacted by targeting 2 intuition suggests that an outlet

government action social capital and development reviewing the evidence on synergy abstract instead of assuming a zero sum relationship between government involvement and private cooperative efforts the five preceding articles argue for the possibility of state society synergy that active government and mobilized communities can enhance each others developmental efforts this article draws on these articles to explore the forms and sources of state society synergy i argue that synergy usually combines complementarity with embeddedness and is most easily fostered in societies characterized by egalitarian social structures ard robust coherent state bureaucracies i also argue however that synergy is constructable even in the more adverse circumstances typical of third world countries

behavioural and material determinants of production relations in agriculture in this essay we develop a framework for analysing the major institutions governing the production and exchange of output and the primary factors of production in rural areas the analysis incorporates general considerations of risk and information constraints jointly with the principal material attributes of agriculture and of agricultural production factors the framework is used to analyse barriers to the existence of the major intertemporal and factor markets it is applied specifically to land scarce environments for which it provides an internally consistent explanation for many of the well documented institutional features of such settings in addition the analysis provides new implications for among other phenomena the inter relationships among ownership holdings operational scale family size and factor productivity for the scarcity of animal rental markets and use of animals as collateral for the renting out of land by small landowners and for the existence of plantations for certain crops

advertising competition and entry in media industries this paper presents a model of media competition with free entry when media platforms are financed both from advertising receipts and customers subscriptions we establish a relationship between the equilibrium levels of prices advertising and entry the welfare maximizing levels and the advertising technology under constant or increasing returns to scale in the audience size we find an excessive level of entry and an insufficient level of advertising we then extend the analysis along several dimensions the price as a strategic variable on the market for advertising free media platforms and the media quality dimension

recent developments in dynamic advertising research a variety of continuous time differential functions have been developed to investigate dynamic advertising problems in business and economics fields since major dynamic models appearing before 1995 have been reviewed by a few survey papers we provide a comprehensive review of the dynamic advertising models published after 1995 which are classified into six categories i nerlove arrow model and its extensions ii vidale wolfe model and its extensions iii lanchester model and its extensions iv the diffusion models v dynamic advertising competition models with other attributes and vi empirical studies for dynamic advertising problems for each category we first briefly summarize major relevant before 1995 models and then discuss major after 1995 models in details we find that the dynamic models reviewed in this paper have been extensively used to analyze various advertising problems in the monopoly duopoly oligopoly and supply chain systems our review reveals that the diffusion models have not been used to analyze advertising problems in supply chain operations which may be a research direction in the future moreover we learn from our review that very few publications regarding dynamic advertising problems have considered the supply chain competition we also find that very few researchers have used the diffusion model to investigate the dynamic advertising problems with product quality as a decision variable and the pricing decision has not been incorporated into any extant lanchester model the paper ends with a summary of our review and suggestions on possible research directions in the future

food price policy the rationale for government intervention abstract policy makers in the most successful developing countries have not accepted either of the two major schools of thought on food price policy the neo classical school favours free trade to maximize efficiency of resource allocation the structuralist school favours interventions to satisfy goals for income distribution especially in the rapidly growing rice based economies of asia policy makers have been more concerned about stability of domestic prices than their level relative to world prices this concern traditionally dismissed by economists as purely political is justified on economic grounds because of improved macroeconomic and dynamic efficiency from stable food prices the paper identifies both the benefits from food price stability and the costs of achieving it

competition for attention in the information overload age limited consumer attention limits product market competition prices are stochastically lower the more attention is paid ads compete to be the lowest price in a sector but compete for attention with ads from other sectors equilibrium ad shares follow a ces form when a sector gets more pro table its advertising expands others lose ad market share the information hump shows highest ad levels for intermediate attention levels the information age takes off when the number of viable sectors grows but total ad volume reaches an upper limit overall advertising is excessive though the allocation across sectors is optimal

business models for media firms does competition matter for how they raise revenue the purpose of this article is to analyze how competitive forces may influence the way media firms like tv channels raise revenue a media firm can either be financed by advertising revenue by direct payment from the viewers or the readers if we consider newspapers or by both we show that the scope for raising revenues from consumer payment is constrained by other media firms offering close substitutes this implies that the less differentiated the media firms content the larger is the fraction of their revenue coming from advertising a media firm s scope for raising revenues from ads on the other hand is constrained by how many competitors it faces we should thus expect that direct payment from the media consumers becomes more important the larger the number of competing media products

higher taxes more evasion evidence from border differentials in tv license fees this paper studies the evasion of tv license fees in austria we exploit border differentials to identify the effect of fees on evasion comparing municipalities at the low and high fee side of state borders reveals that higher fees trigger significantly more evasion our preferred estimator indicates that a one percent increase in fees raises the evasion rate by 0 3 percentage points the positive effect of fees on evasion is confirmed in different parametric and non parametric approaches and survives several robustness checks