SNF publications

Journal Title and author
Marine Policy, 125 (2021) Control activities and compliance behavior - Survey evidence from Norway
Florian Klaus Diekert, Linda Nøstbakken and Andries Peter Richter
  In this paper we analyse how mergers between a subgroup of digital newspapers affect media consumers, the newspapers, and the advertisers. Contrary to most of the existing literature, we endogenise the newspapers’ quality decisions. It turns out that the effects depend crucially on whether we assume that consumers single-home (buy access to only one newspaper) or multi-home (buy access to more than one newspaper). Strikingly, we find that a merger increases the average newspaper quality under single-homing. Consumer surplus nonetheless falls. The intuition behind this result is essentially that the merging newspapers will use their increased market power to charge higher consumer prices and invest less in journalistic quality. This harms consumers who intrinsically prefer the editorial profile of the merging newspapers. Under multi-homing, on the other hand, we find that a merger will have no effect on either consumer prices or quality levels, and consumer surplus is thus left unchanged. The advertisers are harmed by the merger under multi-homing, but the lost advertiser surplus is extracted by the newspapers.