The Market for Fake Observations

Kjell Arne Brekke and Tore Nilssen

Memo 25/2011


Memo (pdf)

We show how increased competition in a media market may have implications for the competition between firms that are advertising in that medium. We apply a simple model of a product market with network externalities where firms buy advertising space in a media market and find that there is more entry in the product market, the more competitive the media market is. The paper is the first combining a study of media markets with a behavioral foundation of how advertising a¤ects the demand for the advertised products.

Published June 20, 2014 2:14 PM - Last modified Jan. 24, 2019 11:44 AM