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The welfare effects of bundling in multichannel television markets
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Crawford, Gregory S. and Yurukoglu, Ali (2012) The welfare effects of bundling in multichannel television markets. American Economic Review, Volume 102 (Number 2). pp. 643-685. doi:10.1257/aer.102.2.643
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Official URL: http://dx.doi.org/10.1257/aer.102.2.643
Abstract
We measure how the bundling of television channels affects short-run welfare. We estimate an industry model of viewership, demand, pricing, bundling, and input-market bargaining using data on ratings, purchases, prices, bundles, and input costs. We conduct simulations of à la carte policies that require distributors to offer individual channels for sale to consumers. We estimate that negotiated input costs rise by 103.0 percent under à la carte. These higher input costs offset consumer benefits from purchasing individual channels. Mean consumer and total surplus change by an estimated — 5.4 to 0.2 percent and — 1.7 to 6.0 percent, respectively. (JEL D12, L11, L51, L82, M31)
| Item Type: | Journal Article | ||||
|---|---|---|---|---|---|
| Divisions: | Faculty of Social Sciences > Economics | ||||
| Journal or Publication Title: | American Economic Review | ||||
| Publisher: | American Economic Association | ||||
| ISSN: | 0002-8282 | ||||
| Official Date: | 2012 | ||||
| Dates: |
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| Volume: | Volume 102 | ||||
| Number: | Number 2 | ||||
| Page Range: | pp. 643-685 | ||||
| DOI: | 10.1257/aer.102.2.643 | ||||
| Status: | Peer Reviewed | ||||
| Publication Status: | Published | ||||
| Access rights to Published version: | Restricted or Subscription Access |
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