Competition and Price Discrimination in Yellow Pages Advertising

We examine the effect of competition on second-degree price discrimination in display advertising in Yellow Pages directories. Our main empirical finding is that while competition is associated with lower prices, the association is not proportional along the range of product offerings. Instead, dire...

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Bibliographic Details
Published in:	The Rand journal of economics Vol. 36; no. 2; pp. 378 - 390
Main Authors:	Busse, Meghan, Rysman, Marc
Format:	Journal Article
Language:	English
Published:	Santa Monica RAND 01-07-2005 The RAND Corporation Rand, Journal of Economics Rand Corporation
Series:	RAND Journal of Economics
Subjects:	Advertising Comparative studies Competition Consumer advertising Curvature Demography Directories Economic competition Economic models Empirical tests Forecasts and trends Hypothesis testing Imperfect competition Marginal costs Market competition Market prices Market theory Press Price discrimination Price levels Publishing industry Telephone directories United States United States > US
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Summary:	We examine the effect of competition on second-degree price discrimination in display advertising in Yellow Pages directories. Our main empirical finding is that while competition is associated with lower prices, the association is not proportional along the range of product offerings. Instead, directories that face more competitors offer price schedules that display a greater degree of curvature than directories facing less competition. This means that purchasers of the largest ads pay less per ad size relative to purchasers of small ads in more-competitive directories.
Bibliography:	ObjectType-Article-2 SourceType-Scholarly Journals-1 ObjectType-Feature-1 content type line 23
ISSN:	0741-6261 1756-2171