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Contribution Details

Type Working Paper
Scope Discipline-based scholarship
Title The welfare effects of vertical integration in multichannel television markets
Organization Unit
  • Gregory S. Crawford
  • Robin S Lee
  • Michael D Whinston
  • Ali Yurukoglu
  • English
Institution National Bureau of Economic Research
Series Name NBER Working Paper Series
Number 21832
Number of Pages 60
Date 2015
Abstract Text We investigate the welfare effects of vertical integration of regional sports networks (RSNs) with programming distributors in U.S. multichannel television markets. Vertical integration can enhance efficiency by reducing double marginalization and increasing carriage of channels, but can also harm welfare due to foreclosure and raising rivals' costs incentives. We estimate a structural model of viewership, subscription, distributor pricing, and affiliate fee bargaining using a rich dataset on the U.S. cable and satellite television industry (2000-2010). We use these estimates to analyze the impact of simulated vertical mergers and de-mergers of RSNs on competition and welfare, and examine the efficacy of regulatory policies introduced by the U.S. Federal Communications Commission to address competition concerns in this industry.
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