The welfare effects of endogenous quality choice in cable television markets

Arbeitspapier

We measure the welfare consequences of endogenous quality choice in imperfectly competitive markets. We introduce the concept of a "quality markup" and measure the relative welfare consequences of market power over price and quality. For U.S. paid-television markets during 1997-2006, we find that not only are cable monopolists' prices 33% to 74% higher than marginal costs, but qualities are also 23% to 55% higher than socially optimal and the welfare costs of each are similar in magnitude. Such evidence for "quality inflation" by monopolists is at odds with classic results in the literature.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: Working Paper ; No. 202

Klassifikation und Themen

• Klassifikation: Wirtschaft ; Information and Product Quality; Standardization and Compatibility ; Oligopoly and Other Imperfect Markets ; Entertainment; Media ; Telecommunications ; Model Construction and Estimation
• Thema: industrial organization ; endogenous quality ; imperfect competition ; monopoly ; cable television ; pay television ; welfare ; quality markup

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Crawford, Gregory S. ; Shcherbakov, Oleksandr ; Shum, Matthew
• Ereignis: Veröffentlichung
• (wer): University of Zurich, Department of Economics
• (wo): Zurich
• (wann): 2015

Weitere Informationen

• DOI: doi:10.5167/uzh-112429
• Handle: http://hdl.handle.net/10419/126595
• Letzte Aktualisierung: 20.09.2024, 08:23 MESZ