The Economics of Media Markets Ralf Dewenter Discussion Paper No. June 2003 Universit?t der Bundeswehr Hamburg University of the Federal Armed Forces Hamburg F?chergruppe Volkswirtschaftslehre Department of Economics 10 The Economics of Media Markets - A Literature Review - Ralf Dewenter ? University FAF Hamburg Abstract Media and especially mass media like newspapers or magazines are characterised by a number of peculiarities which are interesting from both a theoretical and empirical point of view. The interrelationship of reader and advertising markets, high sunk costs and large economies of scale are typical features. This paper reviews the existent literature on media mar- kets and their peculiarities and lines out areas for further research. ? Adress: Ralf Dewenter, University of the Federal Armed Forces Hamburg, Institute for Economic Policy, Department of Economics, Holstenhofweg 85, D-22043 Hamburg, Germany, phone: ++49-40-6541-2946, email: ralf.dewenter@unibw-hamburg.de. 1 1 Introduction The media and especially the mass media provides interesting phenomena for scientific research from various points of view. Apart from economics the media can also be analysed from a political, psychological or from a journalistic perspec- tive. Fields of interest are the diversity of opinion, political influence of the mass media or the freedom of the press, to mention only a few. From an economic po- sition, the interrelationship of the sub-markets is a salient characteristic of mass media. Even though this interrelationship is not an exclusive characteristic of media markets, they are surely an important example for this phenomenon. The deciding feature of interrelated markets is the interdependency of the respective demands. An increment of the demand for, say, newspapers also results in an increasing demand for advertising. In contrast to standard complementary products, the reverse relation is not unconditionally symmetric. For example, if the readers’ valuation for advertising is negative (see Blair and Romano 1993) there are asymmetric relations. Thus, products o?ered by a media firm are neither pure substitutes nor complements. Moreover, and at least as important as the asymmetries, the consumers of the two products are not identical. Therefore, interrelated markets can be described as a peculiar phenomenon, which is not comparable with typical product market relations. As mentioned above, media firms that publish newspapers or magazines have to consider two markets, the markets for the medium itself (primary market) and the market for advertising (secondary market). Since supplements in print media also generate additional costs and require additional prices, a di?erentiated consideration of advertisements and supplements would probably be appropriate. Therefore, at least two or three di?erent prices have to be considered by the 2 publisher, neglecting price and product di?erentiation. Moreover, a number of additional parameters are subject of the optimisation process as, for example, the quality of editorial contents and advertising. Similar market relations as for print media can be found with Internet portals. The Internet provider has to optimise access fees on the one hand and advertising rates for banners on the other hand. Also television and radio stations have to consider primary and secondary markets, the broadcasting and advertising mar- ket. However, in contrast to other media and apart from Pay TV, free-to-air broadcasters only have to optimise the advertising rate. Despite the absence of prices for viewer, the TV and radio stations compete in program quality in pri- mary markets. A further example of interrelated media markets are cinemas. The cinema operator is faced with the demand for three di?erent products, therefore she has to optimise the respective prices. Apart from ticket prices and advertising rates, also a vector of concession rates has to be set. Interrelated markets, also exist in other sectors (even though they are fre- quently associated with media markets). Sports events, for example, combine several markets, where the demand for advertising, concession, broadcasting and, last but not least, the event itself, are characterised by interdependency. And also other events like music concerts or theatre performances and, additionally, insti- tutions like amusement parks are all di?erent types of interrelated markets, if advertising plays any role for these events. 1 Further features of media markets While the interrelationship of primary and secondary markets is the main feature of the mass media there are also some additional important characteristics to be discussed in the following. These features distinguish media markets from other 3 interrelated markets. Especially the print media exhibits large economies of scale, as a number of empirical studies on newspapers and magazines have shown. Moreover, the ex- istence of these scale economies is frequently asserted as a main reason for the persistent concentration in media markets and, therefore, for market power. Fur- thermore, intra-industry concentration and also cross-ownership of media prod- ucts is a characteristic worth mentioning. Not only in Germany, but also in Europe, the United States and Australia, there are several firms which operate in di?erent media branches such as print media, radio broadcasting and television. Some few examples of the largest worldwide acting cross-ownership firms are AOL Time Warner, Bertelsmann, Viacom, or Rupert Murdoch’s News Corporation. An important requirement for analyses on interrelated demand is the defini- tion of the relevant markets. This is not always a trivial task. Even if the primary markets, as for example copy markets, are concentrated, it is not necessarily the case that the secondary markets are also highly concentrated as well. Because of possible substitutional relationships, especially to advertising space in vari- ous di?erent media products, market delineation is not identical for primary and secondary markets. The consequence are asymmetries with respect to markets structures. A further characteristic of media products is an e?ect that can be described in terms of habit formation or addictive behaviour. Newspaper habit and par- ticularly Internet addiction (see for example Stein 1997, Gri?th 1999 or Beard 2002) are phenomena subject to psychological and psychiatric research. Not only subscriptions, but also newsstand sales seem to be path depending. Moreover, some mass media have public good properties because both, radio and TV broad- casting are neither not rival and to some extend not excludable. Note, that this 4 only holds for the primary market, as of course, advertisements are excludable and rival products. Other mass media can be described as network goods. In this connection, the Internet should be beyond dispute, because of its physical net- work properties, but also newspapers, magazines or television programmes can be considered as some kind of network products, namely in the sense of social networks. Of course, media products are also frequently characterised by price discrimination. Newsstand prices (i.e. of newspapers or magazines) and sub- scription rates are typically di?erentiated. The same is true for Internet portals or for Pay TV programmes. Finally, also regulation of mass media is an important feature. Because of the existence of economic factors like scale economies, barriers to entry and relatively high fixed costs, but also for political reasons the media sector is usually (still) heavily regulated. Some other features and aspects of mass media will not be considered in the following, even if they are interesting fields of economic studies. Therefore, topics such as the convergence of the media (see e.g., Nilsson, Nuld′en and Olsson 2001) or the essential facilities characteristics of mass media will not be discussed. 2 However, the focus of this paper is basically on the pricing behaviour in in- terrelated markets and related topics. The paper is organised as follows: In the next section theoretical consider- ations of media markets are reviewed and in the fourth section some empirical work on interrelated markets and the peculiarities of mass media is discussed. The last section concludes. 5 2 Theoretical considerations The literature on the interrelationship of markets is strongly connected with media markets of several kinds. Most theoretical and empirical studies deal with the newspaper sector and focus on United States, Great Britain, and Australia. While some others concern media like television or radio, but only few of them investigate the interdependency of the markets. For this reason most of the literature surveyed in this paper is related to newspaper advertising and reader markets. Theoretical considerations of interrelated markets are rare. Only few studies deal with the interdependency of reader and advertising markets or the influence of di?erent cost structures. Moreover, none of these articles analyse features like quality provision or habit e?ectss. Only few analyse separate (for example oligopolistic) market structures on advertising and reader markets. Actually, most studies consider monopolistic media firms, which is surely an appropriate and realistic assumption for most reader markets but (also due to the possibility of inter media competition) not necessarily for advertising markets. As stated above, studies on (inter)related markets are mostly concerned with traditional media like newspapers or magazines. Correspondingly, the first arti- cle of this kind by Corden (1952) dealing with demand dependency, analyses the relationship between newspapers’ advertising and reader markets. Corden con- siders the optimisation problem of a newspaper firm using geometric techniques within a static framework. However, Corden does not consider interrelated, but only related markets. 3 On the one hand, he asserts that circulation is an impor- tant variable for both markets, but on the other hand he neglects to consider the influence of advertising on the demand for copies, even though he is aware of this 6 connection: “It will be noted that the circulation is the link between the two prod- ucts sold by the newspaper–printed matter for readers and space for advertisers. The circulation is the quantity sold of one of the prod- ucts and determines the quality of the other. A link in the reverse direction is also possible.” [...] “We shall assume the absence of this reverse link, as it is generally not su?ciently important to jus- tify the complexities with its introduction into the analysis would involve.” W.M. Corden (1952), p. 182 Furthermore, Corden distinguishes four di?erent types of costs: fixed costs of the plant, buildings and equipment, costs concerning the editorial, costs that vary with circulation, and the costs of advertising. The copy price is assumed to be fixed, and editorial quality increases both, the demand for copies and costs. Total average costs are assumed to fall with increasing circulation. Corden, therefore, considers economies of scale in the newspaper production. The results from his analysis are as follows: At first two products are identi- fied, advertising and copies. Introducing a third product, classified advertising, an interrelationship of these markets is conceded. Moreover, as circulation can only be raised by increasing the editorial quality and increasing quality will lead to an increase in average costs. Increasing the circulation could, therefore, lead to losses from the reader market, if the e?ects of a variation in quality raises costs respectively stronger than revenues. On the other side, revenues from the advertising market are directly linked to circulation. And the higher the circulation the higher the revenues from adver- tising markets. Nevertheless, the advertising space and, therefore, revenues from advertising markets are assumed to increase less than proportionally with in- creasing circulation. 4 Furthermore, costs for advertising vary proportionally with 7 advertising space and circulation. Thus, there is a maximum of advertising space optimising profits from the advertising market. Overall, taking both markets into account, Corden concludes that a ‘normal’ situation is reached, if reader markets are characterised by losses and advertising markets are highly profitable. 5 This situation is due to of the high circulation generated in the reader market which is, of course, higher than the optimal circu- lation considering only the reader market, since a higher number of copies raises the demand for advertising space. Due to a less than proportional e?ect from circulation on advertising, circulation and editorial quality is naturally restricted. A full model of a newspaper monopolist’s pricing decision is o?ered by Blair and Romano (1992). Starting from two interrelated demands for copies and ad- vertising, profit maximising pricing rules for each market are derived. In contrast to a standard monopoly price, the (feedback) e?ect from the respectively opposite market has to be taken into account. Assuming a positive influence of both, the demand for advertising on the demand for copies and vice versa, price decreases on both markets lead to a stronger response in respective quantities in comparison to usual monopolistic situations. Decreasing the copy price, for example, leads to an increase in the demand for copies and, therefore, to a rise in the demand for advertising space. The increased advertising volume, in turn, leads to a further increase in copy demand. These direct and indirect e?ects can be summarised as the phenomenon of the circulation-advertising spiral. Furthermore, because of this spiral the equilibrium copy price is lower than a usual monopoly price and possibly even below marginal cost. Finally, Blair and Romano conclude that vertical integration of newspaper publishers and distributers are a typical conse- quence of this interrelationship because costs can be decreased and copy prices be set optimally. 8 In contrast to Blair and Romano, Chaudhri (1998) models reader and adver- tising markets in a di?erent manner. Instead of interrelated markets, he first assumes related markets where the demand for advertising depends on the de- mand for copies (simply by multiplying the revenues for advertising with the circulation) but not vice versa. At first a ‘naive’ approach is analysed, where the newspaper firm is a monopolist on the reader market but the advertising market is of polypolistic structure. Marginal costs are assumed to be constant. Not sur- prisingly, Chaudhri finds that the price cost margin is smaller than for a usual monopoly. In a second model, the author analyses competitive situations in both markets, which results in a larger equilibrium circulation. Introducing a new cost function, where costs are the product of circulation and the square of advertising, Chaudhri calculates a zero copy price. Furthermore, he concludes that even a monopolist in both markets would set copy prices below marginal costs. And, under the assumption that price elasticities in both markets are larger than one in absolute values, the newspaper monopolist would set the copy price equal to zero, as in the competitive case. Finally, the model is augmented by the interrelationship of the markets. Chaudhri concludes that, first, in a competitive situation in both markets, the newspaper firm sells the usual quantities according to the price equals marginal cost rule. Secondly, in a situation where newspaper markets are monopolis- tic but advertising markets are competitive, the copy price is not only above marginal costs but also corresponds to the standard monopolist pricing rule. Un- fortunately, the author neglects to analyse more realistic market structures for advertising markets like duopolies or oligopolies. An interesting and methodically di?erent study on interrelated markets is provided by Baye and Morgan (2000). The authors consider a media firm, i.e. 9 a newspaper, which sets subscription and advertising fees to maximise profits, under the assumption of a continuum of risk-neutral consumers and two identical firms, which are able to transmit price information using newspaper advertising. Thus, advertising is informative and the only source firms can use to publish their prices. Consumers are able to subscribe to the newspaper and, therefore, to receive price information. The equilibrium probabilities to advertise prices are identical for both firms. Given this information, optimal fees are calculated. Interestingly, Baye and Morgan derive optimal advertising and subscription rev- enues and the share of advertising revenues to total revenues, which is almost the same share as one can observe for the 300 top magazines in the United States. 3 Empirical studies This section reviews empirical of media markets. As with most theoretical studies, the main focus is on print media, i.e. newspapers or magazines. Starting from general considerations of print media, special characteristics of media markets like interrelationship, economies of scale and concentration are examined. Finally, an overview of articles using data on di?erent media products is presented. Reddaway (1963) analyses di?erent kinds of newspapers in the United King- dom using descriptive statistics by the Royal Commission on the Press. His main focus is on the sorts of newspapers that can coexist and the number of papers that are able to survive in a distinct class of newspapers. Reddaway finds that de- spite of the di?erences in circulation, ‘quality’ newspapers (with low circulation) can coexist with ‘popular’ (and high circulation) newspaper. Moreover, even though the first copy cost and the variable costs per copy are higher for ‘qual- ity’ newspapers, they are able to survive. One reason lies in the nature of the readers that allows to set higher advertising rates. Reddaway concludes further- 10 more that product di?erentiation in the newspaper industry leads to monopolistic competition. In connection with high economies of scale he finds that monop- olistic competition leads to concentration within a certain class of newspapers. However, the number of separated classes is not a?ected by the concentration process. Concentration and price relationship A number of empirical studies on media markets analyse the influence of concen- tration and market structure on the newspaper firms’ price setting behaviour. All of these studies consider the advertising market because of its importance and be- cause of the comparability of the single products. A high degree of concentration is a typical characteristic of media markets in most industrialised countries. In his paper on oligopoly theory Stigler (1964) analysed advertising rates in 53 cities in the United States. Using data on evening newspapers from one- and two-newspaper cities in 1939 he regressed the advertising rates on circulation and circulation to the square within a simple log-linear framework. Stigler found that rates were 5% higher than average in one-newspaper cities and 5% lower than average in two-newspaper cities. Unfortunately, Stigler does not consider the reader market and the interrelationship between the markets. Landon (1971) analyses the advertising rates in 68 cities, extending Stigler’s examination by using additional control variables like the regional average in- come, product market concentration and retail sales. As Stigler he concludes that advertising rates in monopolies are higher than in oligopolies. However, interrelated markets are again not considered. A cross-section reduced form analysis is carried out by Ferguson (1983) taking account of the connection to the reader market. To evaluate the influence of media cross-ownership and competition on advertising rates he uses information on 815 11 local daily U.S. newspapers. Ferguson finds that both cross-media ownership (like newspaper-television or newspaper-radio station ownerships) and chain ownership lead to higher advertising rates. The impact of concentration and di?erent markets structures on the advertis- ing rates of Irish provincial newspapers is analysed by Thompson (1984). Using information on 50 regional Irish newspapers for 1982, two endogenous variables, the price per standard column inch and the price per page of advertisement, are regressed on a number of exogenous variables and di?erent concentration mea- sures. The main outcome is that prices are positively connected with concentra- tion. Moreover, splitting the Herfindahl index into several critical concentration classes, leads to further insights: Not only a positive, but also an increasing influence of concentration regarding the di?erent classes is observable. An investigation into advertising rates and market structure (but also ne- glecting interdependency of reader and advertising markets) is carried out by Reimer (1992). In contrast to the former analyses, Reimer finds a negative rela- tion between concentration and advertising rates. He explains this results with the existence of scale economies due to high fixed costs in the production pro- cess of newspapers. Regressing the price of a standardised advertisement on circulation, average income and a dummy variable determining the competitive situation, Reimer finds only weak evidence for his hypothesis. More evidence appears tabulating the means and standard deviations of advertising rates per thousand readers for both, monopolistic and duopolistic markets. The rates in monopolistic markets lie slightly under those from duopolistic ones. As in the case of the other two studies, the sample (45 cities) is relatively small. A further and comparable study of advertising rates in relation to market concentration and market structure is Dewenter and Kraft (2001). Using data 12 on 709 German regional daily newspapers, the authors find strong evidence for a positive relation between advertising rates and concentration on the one hand and advertising rates and market structure on the other hand. Moreover, prices in duopolistic markets do not significantly di?er from those in monopolies. How- ever, the rates are higher than those in oligopolistic markets with three or four competitors. This may point towardss collusive behaviour in German newspa- per advertising markets results. In contrast to the other studies mentioned above Dewenter and Kraft use a standardised advertising rate per reader as endogenous variable and various specifications with varying number of controls.6 Besides newspapers, a number of studies deal with concentration in (local) ra- dio broadcasting markets. For example, Ekelund, Ford and Koutsky 2000 analyse increasing levels of concentration in local radio markets and the e?ects on prof- itability. The results do not support the hypothesis that increasing circulation leads to higher profitability of radio stations. Brown and Williams 2002, provide an analysis on the influence of concentration on advertising rates in local radio markets. While local concentration is found to rise advertising rates only mod- erately, an increase in national concentration even seems to lower the respective prices. Economies of scale Rosse (1967) analyses print media with a di?erent focus. In his seminal paper, Rosse investigates economies of scales in the newspaper industry. Starting from a demand equation for subscriber-inches advertising, which is column inches of published advertising space multiplied with circulation and assuming that long- run costs can be separated into a variable and constant part with respect to subscriber-inch output, he develops a full market model. Due to the absence of important exogenous variables to identify the model, it is not testable in the 13 original form. Therefore, Rosse uses the first-order condition with respect to subscriber-inch prices to obtain a testable equation and to estimate the strength of economies of scale. Rosse uses two di?erent samples to analyse the cost structure of print me- dia markets. The first includes average data of small firms over 24 years, and the second includes information of individual firms of di?erent sizes over four years. Overall, he finds that a 10% increase in subscriber-inch output leads to a approximate 3% decrease in average costs. Moreover, this relationship is stable over time and does not change for a sample period of 24 years. Interestingly, an important feature of his analysis is that Rosse is able to identify the cost struc- ture of the U.S. newspaper industry without using cost variables (see also Rosse 1970). However, an important assumption of his model is that the markets are related but not interrelated. Thus, consumers are assumed to be indi?erent with respect to the advertising volumes of a newspaper. Nevertheless, the evidence for the existence of scale economies o?ers an explanation for the concentration which seems to be a typical characteristic of print media products. The market behaviour of newspaper firms with economies of scale in interre- lated markets is considered by Bucklin et al. (1989). The aim of that study is to determine the behaviour of firms when the survival of only one newspaper is predictable. Apart from economies other characteristics of newspaper markets are also identified, such as high fixed costs, the interrelationship of circulation and advertising, randomness in newspapers’ success7, low re-entry threat, high sunk costs and rising product di?erentiation. Bucklin et al. conclude that strong incentives for ruinous competition exist. Using cross-section data on 50 major newspapers located in 30 cities in the United States in 1980, price, quantity and quality setting is analysed under dif- 14 ferent market structures. Overall, the results confirm the hypothesis of ruinous competition in the newspaper industry to be present or having occurred in some markets. Furthermore, Bucklin et al. find no evidence for higher advertising rates in monopolies. The authors do find strong evidence for a higher editorial quality in monopolistic markets though. However, smaller firms titled as followers also o?er a higher quality than oligopolists which seem to be Stackelberg-leaders. Furthermore, Bucklin et al. estimate elasticities of advertising space with re- spect to advertising rates and circulation. These lie between -0.71 to 1.509 and 1.05 to 1.54. The price elasticity of demand for copies is insignificant. 8 The elasticity of circulation with respect to advertising is statistically significant and positive (0.27). Regarding advertising rates, Bucklin et al. measure elasticities with respect to circulation of about 0.85 to 0.99, which is not surprising, since doubling the circulation results in a halved price per readers. Market relations A full model of newspaper markets is provided by Dertouzos and Trautman (1990). Starting from a profit function, where revenues form advertising and reader markets are confronted with the respective costs, the authors derive sev- eral testable equations. The endogenous variables in their system are the demand for advertising, the demand for copies (or circulation), the costs of advertising, the costs of circulation and the costs of the editorial (or news). Dertouzos and Trautman use cross-section data on 129 newspaper firms from the United States. The exogenous variables include information on the average income of the read- ership, the number of households within a city, the advertising rate and copy price, the fact whether a newspaper belongs to a group of papers, the location, the quality, the number of local television stations, and the degree of competition in local markets. 15 The most important outcomes of the study are as follows: First, as Rosse (1967), Dertouzos and Trautman (1990) find strong evidence for the existence of economies of scale in the newspaper industry. They conclude that the monopolis- tic structure of most markets is a consequence of those scale economies. Further- more, the existence of local broadcast does not seem to influence either the de- mand for copies nor the demand for advertising. Chain ownership of newspapers has seemingly no e?ect on the cost structure of newspapers. Chain ownership, therefore, seems to be a?ected rather by tax advantages than scale economies. Nevertheless, economies occur on a single plant level with respect to both, ad- vertising and circulation. Interestingly, Dertouzos and Trautman estimate both, the partial price elas- ticity of demand for advertising space (-0.87) and the elasticity including the feedback e?ects from reader markets, taking into account the circulation adver- tising spiral (-1.08). Not surprisingly, the elasticity considering feedback e?ects is statistically significant di?erent from the other. Rising the advertising rate leads to a decrease in the demand for advertising space and (assuming positive relations between advertising and demand for copies) a decline in circulation. This in turn leads to a reduced demand for advertising space. However, the magnitude of the respective coe?cient does support the hypothesis that a circulation-advertising spiral exists. Moreover, the elasticity of demand for advertising space with respect to circulation is not significantly di?erent from the elasticity of demand with re- spect to advertising rates. Furthermore, Dertouzos and Trautman provide some evidence on the importance of overlapping newspaper markets. Various issues A number of studies do not use print media data to analyse unconditionally the interrelationship of the markets, but to examine special features, as for example, 16 entry decisions, price rigidities or the influence that socio-demographic factors of the readership have on advertising markets. Some others use time series data to investigate the competitive behaviour of newspapers over time. To give an insight into further interesting literature some of these studies are summarised in the following. Thompson (1988) analyses the marginal willingness to pay for advertisements in the newspaper industry. Using data on British newspaper, hedonic prices of advertisements with respect to the characteristics of the readership are calcu- lated. Thompson finds strong evidence for the importance of these factors for advertising customers’ marginal willingness to pay. Hence, it is not only the num- ber of readers, but primarily their characteristics and whether readers consist of advertisers’ target group, that is responsible for advertising demand. The determination of circulation, cover price and advertising rates with re- spect to income as a reader characteristic is analysed by Thompson (1989). Clas- sifying the readers into three di?erent categories a simultaneous three-equation system is analysed where circulation, copy price and advertising rate are assumed to be endogenous. Thompson finds that a negative relation between circulation and the portion of readers with high income exists. Moreover, display advertis- ing rates react more sensitive to reader’s characteristics than prices for classified advertisements. Abbring and van Ours (1994) consider the Dutch newspaper market with re- spect to advertising, circulation and prices using time series of aggregated data. Furthermore, macroeconomic variables like household consumption, gross invest- ment in capital goods, unemployment and production costs are included to eval- uate the influence of these factors. Reader markets are found to be inelastic with respect to variations in copy prices and strongly connected with the advertising 17 space. Advertising markets and also reader markets are found to be influenced by macroeconomic development. Fisher and Konieczny (1995) analyse the rigidity of newspaper copy prices. Using data data on Canadian newspapers, for the period 1965-1990, they find strong evidence that monopolies change prices more frequently than oligopolies, but that the price changes of oligopolies are larger. A number of further studies deal with media products, such as newspapers, magazines, television, or radio stations. Therefore, Table 1 summarises all of the above mentioned and additional studies of media markets. 4 Conclusion This paper considers some theoretical and empirical work on media markets and their peculiarities. Especially the interrelationship of primary and secondary markets, but also other features like sunk costs, economies of scale, highly con- centrated markets or market entry has been the topic of various studies. Some of the topics have been su?ciently analysed in both respects, theoretically and empirically. Some others are relatively new. As mentioned above, the most important feature of mass media is the inter- relationship of primary and secondary markets. Depending on market relations, the market structure and the elasticities in both markets, advertising rates and copy prices may significantly di?er from their respective marginal costs. Typi- cally, strong price competition in reader markets coincides with relatively high advertising rates. Because of the market interdependency media firms may be able to realise high profits from advertising markets but charge copy prices below marginal costs. Hence, even monopolistic profits in advertising markets may be competed away in reader markets. 18 On the other hand, a narrow market definition in advertising markets and the resulting oligopolistic market structure may probably facilitate collusive be- haviour. Moreover, other factors may also be responsible for a tendency for collusive behaviour. For example, high barriers to entry are typically found in media markets, such as sunk costs or large economies of scale. Indeed, also the high concentration of most media markets give reason for anti-competitive mar- ket structures. Some of the empirical studies find evidence for collusive prices or at least for higher prices in concentrated markets. Other studies argue that a high concentration is necessary to exploit of the large economies of scale and that, therefore, prices are lower in monopolistic markets. Interestingly, none of the studies deal with addiction or habit formation in a theoretical way. And only few analyse habit e?ects in interrelated or media markets empirically. Thus, in contrast to the psychological literature, economic analyses of habituated media markets are still missing. Especially the pricing behaviour of a media firm which is faced with habituated demand in the reader market could be of interest. However, also the empirical analysis of their existence and strength is interesting. 9 Moreover, theoretical and empirical work on quality provision in media mar- kets is also rare. One example for a theoretical and empirical analysis of this kind is Dewenter (2003b). The paper analyses the quality setting of German regional newspapers on regional advertising markets. Both theoretical considerations and empirical evidence support the hypothesis that monopolistic firms provide higher printing qualities than duopolies. Even if interrelated media markets have been analysed in various directions, it is obvious that some further research for example with respect to habit formation or quality provision may be an interesting task. However, also the consideration of 19 other issues may possibly provide interesting results. Modelling the advertising market under the assumption of Bertrand competition is probably a bit more realistic than assuming quantity competition. Moreover, also the analysis of horizontal mergers or vertical integration has not been yet. Acknowledgements: I am grateful to Justus Haucap for valuable comments. Notes: 1 The absence of advertising market leads to the standard multi-product firm prob- lem (see Tirole, 1997, pp. 69-70) and can not be described by the term “interrelated markets”, because the relations between the single products are substitutional or com- plementary but not interrelated in the sense of media markets. The most important di?erence is the possible asymmetric relation of the demand for advertising and the de- mand for copies. Moreover, customers in readers and advertising markets are typically not identical. 2 Typically, mass media are distributed over physical networks. Most of these networks are characterised by large economies of scales and sunk costs, therefore, the essential facilities problem is frequently present. 3 Markets are said to be interrelated if the demand for advertising and the demand for the media are interdependent (e.g., readers are interested in advertising and the adver- tising customers are interested in number of readers). In related markets there is only a one-way relationship (e.g., readers are not interested in advertising, but advertising customers are still interested in circulation). 4 Corden argues that this is due to psychological preferences and imperfect markets. 5 The author denotes this situation as normal for newspaper markets in Australia, the United States and Great Britain. 6 Again this study does not analyse the interdependency of the markets, but because of the usage of the standardised advertising rate per reader, there is no identification problem. Furthermore, usage of lagged circulation as a control variable accounts for scale economies which are typical for this industry. 7 The term ‘randomness’ captures the uncertainty of a newspaper firm about the success of rising its editorial quality, because of random disturbances in advertisers preferences. 20 8 Two facts lead to this insignificant e?ect in our opinion: First, a high ratio of daily newspaper circulation are subscriptions. Therefore, short-term switching costs are high and varying prices cannot lead to large e?ects in quantities. Additionally, newspapers are commonly characterised by habit e?ects. Thus, price elasticities should be low. 9 The only empirical papers dealing with habit e?ects and addiction in media mar- kets are Cameron (1999) and Dewenter (2002b). A theoretical consideration of habit formation in interrelated markets can be found in Dewenter (2003a). 21 Table 1: Some Literature on (interrelated) media markets Author Issue Corden (1952) Relationship of reader and advertising markets and profit optimisation Reddaway (1963) Co-existence of ‘quality’ and ‘popular’ newspapers with di?erent cost structures Stigler (1964) Advertising rates in di?erent market structures Rosse (1967) Monopolistic competition and economies of scale in newspaper markets Landon (1970) Advertising rates in di?erent market structures Reekie (1976) Price elasticities on reader markets for evening newspapers in the United Kingdom Wagner (1981) General consideration of di?erent newspaper industries in di?erent countries Dertouzos (1982) Growth in newspaper chains with respect to scale economies, capital markets and tax laws Ferguson (1983) Concentration, media cross-ownership and advertising rates Merrilees (1983) Di?erent copy price strategies of Australian newspapers in the period 1941-1982 Thompson (1984) Advertising rates and concentration Cecchetti (1986) Price adjustment of copy prices for magazines Thompson (1986) Market entry in the newspaper industry Thompson (1988) Hedonic advertising prices in the newspaper industry Bucklin et al. (1989) Media firm behaviour under the existence of economies of scale Thompson (1989) Advertising rates, circulation, copy prices and readership income Dertouzos and Trautman (1990) Interrelated markets, competition and cost structure Blair and Romano (1992) Optimal pricing of a newspaper monopolist Reimer (1992) Advertising rates and market structure Abbring and van Ours (1994) Aspects of the Dutch newspaper sector using aggregated data and macroeconomic variables markets Fisher and Konieczny (1995) Rigidity of copy prices Pierce and Winter (1996) Bundling in newspaper markets Round and Bentick (1997) Influence of supply and demand factors on magazine subscription dis- counts in Australia Chaudhri (1998) Optimal pricing of a newspaper monopolist when advertising markets are competitive Gabszewicz and Sonnac (1999) Subscription rates and price discrimination Baye and Morgan (2000) Optimal advertising and subscription fees Fisher and Konieczny (2000) Synchronisation of copy prices by newspaper chains in Canada Koschat and Putsis (2000) Influence of socio-demographic factors on advertising prices Sonnac (2000) Readers valuation for press advertising Baye and Morgan (2001) Interactions between advertising and product markets of Internet gate- keepers Dewenter (2001) Substitutability in reader and advertising markets Dewenter and Kraft (2001) Advertising rates, market structure and concentration Kaiser (2001) Website provision and the demand for German magazines Dewenter and Kraft (2002) Price setting of a cinema, serving three di?erent but interrelated mar- kets 22 References Abbring, J.H. and J.C. van Ours, 1994, Selling News and Advertising Space: The Economics of Dutch Newspapers, De Economist, 142(2), 151–170. Baye, R. and J. Morgan, 2000, A Simple Model of Advertising and Subscription Fees, Economic Letters, 69, 345–351. —— , 2001, Information Gatekeepers on the Internet and the Competitiveness of Homogeneous Products, American Economic Review, 91(3), 454–474. Beard, K.W., 2002, Internet Addiction: Current Status and Implication for Employees, Journal of Employment Counselling, 39(1), 2–11. Blair, R.D. and R.E. Romano, 1993, Pricing Decisions of the Newspaper Mo- nopolist, Southern Economic Journal, 54(9), 721–732. Bucklin, R.E., R.E. Caves and A.W. Lo, 1989, Games of Survival in the US Newspaper Industry, Applied Economics, 21, 631–649. Brown, K. and G. Williams, 2002, Consolidation and Advertising Prices in Lo- cal Radio Markets, Media Bureau Sta? Research Paper, Media Ownership Working Group, Federal Communications Commission. Cameron, S., 1999, Rational Addiction and the Demand for Cinema, Applied Economics Letters, 6, 616–620. Cecchetti, S.G., 1986, The Frequency of Price Adjustment: A Study of News- stand Prices of Magazines, Journal of Econometrics, 1, 255–274. Chaudhri, V., 1998, Pricing and E?ciency of a Circulation Industry: The Case of Newspapers, Information Economics and Policy, 10, 59–76. 23 Corden, W.M., 1952, The Maximisation Profit by a Newspaper, Review of Eco- nomic Studies, 20, 181–190. Dertouzos, J.N., 1982, Scale Economies, Newspaper Chains and Government Policy, American Economist, 26(1), 11–15. Dertouzos, J.N. and W.B. Trautman, 1990, Economics E?ects of Media Con- centration: Estimates from a Model of the Newspaper Firm, Journal of Industrial Economics, 39(1), 1–14. Dewenter, R., 2000, Messung von substitutionalen Beziehungen mithilfe von Kreuzkorrelationsfunktionen: Eine alternative Methode der Marktstruktu- ranalyse, Jahrbuch f¨ur Wirtschaftswissenschaften (Review of Economics), 51(2), 153–174. ——, 2002b, Rational Addiction to News? Habit Formation and Print Media Usage, University Essen, mimeo. ——, 2003a, Media Markets with Habit Formation, University of the Federal Armed Forces Hamburg, mimeo. ——, 2003b, Quality Provision in Interrelated Markets, University of the Federal Armed Forces Hamburg, mimeo. Dewenter, R. and K. Kraft, 2001, Eingeschr¨ankter Wettbewerb und abges- timmtes Verhalten: Konzentration und Anzeigenpreise regionaler Tageszeitun- gen, ifo Studien: Zeitschrift f¨ur empirische Wirtschaftsforschung, 1/2001, 1–24. —— , 2002a, Pricing in Interrelated Markets, University of Essen, mimeo. 24 Ekelund, R.B., G.S. Ford, and T. Koutsky, 2000, Market Power in Radio Mar- kets: An Empirical Analysis of Local and National Concentration, Journal of Law and Economics, 43, 157–184. Ferguson, J.M., 1983, Daily Newspaper Advertising Rates, Local Media Cross- Ownership, and Media Competition, Journal of Law and Economics, 26, 635–654. Fisher, T.C.G. and J.D. Konieczny, 1995, The Relative Rigidity of Oligopoly Pricing, Economics Letters, 49, 33–38. ——, 2000, Synchronization of Price Changes by Multiproduct Firms: Evidence from Canadian Newspaper Firms, Economics Letters, 68, 271–277. Gabszewicz, J.J. and N. Sonnac, 1999, Subscription as a Price Discrimination Device, Recherche Economiques de Louvain - Louvain Economic Review, 65(4), 421–433. Gri?th, M., 1999, Internet Addiction, Fact or Fiction?, Psychologist, 12(5), 246–250. Kaiser, U., 2001, The E?ects of Website Provision on the Demand for German Women’s Magazines, NBER Working Paper 8806, Cambridge (Mass.). Landon J.H.,1971, The Relation of Market Concentration to Advertising Rates: The Newspaper Industry, Antitrust Bulletin, 16(1), 53–100. Nilsson, A., Nuld′en, U. and D. Olssen, 2001, Mobile Media: The Convergence of Media and Mobile Communications, The Journal of Research into Media Technologies, 7(1), 34–38. 25 Reddaway, W.B., 1963, The Economics of Newspaper, Economic Journal, 73, 201–218. Reimer, E., 1992, The E?ect of Monopolisation on Newspaper Advertising Rates, American Economist, 36(1), 65–70. Reekie, W., The Price Elasticity of the Demand for Evening Newspapers, Ap- plied Economics, 8(1), 69–79. Rosse, J.N., 1967, Daily Newspapers, Monopolistic Competition, and Economies of Scale, American Economic Review, 57(2), 522–533. ——, 1970, Estimating Cost Functions Parameters without Using Cost Data: Illustrated Methodology, Econometrica, 38(2), 256–275. Round, D.K. and T.G. Bentick, 1997, Magazine Subscription Discounts in Aus- tralia, Review of Industrial Organization, 12, 555–577. Sonnac, N., 2000, Readers’ Attitudes towards Press Advertising: Are they Ad- lovers or Ad-averse?, Journal of Media Economics, 13(4), 249–259. Stein, D.J., 1997, Internet Addiction, Internet Psychotherapy, American Journal of Psychiatry, 154(6), 890. Stigler, G.J., 1964, A Theory of Oligopoly, Journal of Political Economy, 72, 44–61. Tirole, J., 1997, The Theory of Industrial Organization, The MIT Press, Cam- bridge, Massachusetts. Thompson, R.S., 1984, Structure and Conduct in Local Advertising Markets: The Case of Irish Provincial Newspapers, Journal of Industrial Economics, 33, 241–250. 26 ——, 1986, Entry and Market Characteristics: A Logit Study of Newspaper Launching in the Republic of Ireland, Journal of Economic Studies, 13, 14–22. ——, 1988, Product Di?erentiation in the Newspaper Industry: An Hedonic Price Approach, Applied Economics, 20, 367–376. ——, 1989, Circulation and Advertising Appeal in The Newspaper Industry: An Empirical Investigation, The Journal of Industrial Economics, 37(3), 259–271. Wagner, K., 1981, The Newspaper Industry in Britain, Germany and the United States, National Institute Economic Review, 95, 81–88. 27 Bisher erschinen: Diskussionspapiere der F?chergruppe Volkswirtschaftslehre ? Zimmermann, Klaus W. & Tobias Thomas, Patek Philippe, or the Art to Tax Luxuries, No. 13, (June 2003). ? Dewenter, Ralf, Estimating the Valuation of Advertising, No. 12 (June 2003). ? Otto, Alkis, Foreign Direct Investment, Production, and Welfare, No. 11 (June 2003). ? Dewenter, Ralf, The Economics of Media Markets, No. 10 (June 2003). ? Josten, Stefan Dietrich, Dynamic Fiscal Policies, Unemployment, and Economic Growth, No. 9 (June 2003). ? Haucap, Justus & Tobias Just: Not Guilty? Another Look at the Nature and Nurture of Economics Students, No. 8 (June 2003). ? Dewenter, Ralf, Quality Provision in Interrelated Markets, No. 7 (June 2003). ? Br?uninger, Michael, A Note on Health Insurance and Growth, No. 6 (June 2003). ? Dewenter, Ralf, Media Markets with Habit Formation, No. 5 (June 2003). ? Haucap, Justus, The Economics of Mobile Telephone Regulation, No. 4 (June 2003). ? Josten, Stefan Dietrich & Achim Truger, Inequality, Politics, and Economic Growth. Three Critical Questions on Politico-Economic Models of Growth and Distribution, No. 3 (June 2003). ? Dewenter, Ralf, Rational Addiction to News?, No. 2 (June 2003). ? Kruse, J?rn, Regulierung der Terminierungsentgelte der deutschen Mobilfunknetze?, Nr. 1 (Juni 2003). Frühere Diskussionsbeitr?ge zur Wirtschaftspolitik ? Br?uninger, Michael & Justus Haucap, Das Preis-Leistungs-Verh?ltnis ?konomischer Fach- zeitschriften, Nr. 120 (2002), erschienen in: Schmollers Jahrbuch 123, 2003. ? Kruse, J?rn, Competition in Mobile Communications and the Allocation of Scarce Resources: The Case of UMTS, Nr. 119 (2002), erscheint in: Patrick Rey und Pierrre Buigues (Hg.), European Telecommunications Policy, Edward Elgar Publishing, 2003. ? Haucap, Justus & J?rn Kruse, Predatory Pricing in Liberalised Telecommunications Markets, Nr. 118 (2002). ? Kruse, J?rn, Pay-TV versus Free-TV: Ein Regulierungsproblem?, Nr. 117 (2002), erscheint in: Mike Friedrichsen (Hg.), Kommerz - Kommunikation - Konsum. Zur Zukunft des Fernsehens in konvergierenden M?rkten, 2003. ? Kruse, J?rn, Regulierung der Verbindungsnetzbetreiberauswahl im Mobilfunk, Nr. 116 (2002), als Kurzform erschienen in: Multimedia und Recht, Januar 2003, S. 29-35. ? Haucap, Justus & J?rn Kruse, Verdr?ngungspreise auf liberalisierten Telekommunikations- m?rkten, Nr. 115 (2002), erscheint in: Perspektiven der Wirtschaftspolitik 5, 2004. ? Haucap, Justus & Helmmar Schmidt, Kennzeichnungspflicht für genetisch ver?nderte Lebensmittel: Eine ?konomische Analyse, Nr. 114 (2002), erschienen in: Zeitschrift für Wirtschaftspolitik 53, 2002, S. 287-316. ? Kruse, J?rn & J?rn Quitzau, Zentralvermarktung der Fernsehrechte an der Fu?ball-Bundesliga, Nr. 113 (2002), erschienen in: Zeitschrift für Betriebswirtschaft, Erg?nzungsheft zur Sport?konomie, 2002, S. 63-82. ? Kruse, J?rn & Justus Haucap, Zuviel Wettbewerb in der Telekommunikation? Anmerkungen zum zweiten Sondergutachten der Monopolkommission, Nr. 112 (2002), erschienen in: Wirtschaftsdienst 82, 2002, S. 92-98. ? Br?uninger, Michael & Justus Haucap, What Economists Think of Their Journals and How They Use Them: Reputation and Relevance of Economics Journals, Nr. 111 (2002), erschienen in Kyklos 56, 2003, S. 175-197. ? Haucap, Justus, Telephone Number Allocation: A Property Rights Approach, Nr 110 (2001), erschienen in: European Journal of Law and Economics 15, 2003, S. 91-109. ? Haucap, Justus & Roland Kirstein, Government Incentives when Pollution Permits are Durable Goods, Nr. 109 (2001), erschienen in: Public Choice 115, 2003, S. 163-183. ? Haucap, Justus, Konsum und soziale Beziehungen, Nr. 108 (2001), erschienen in: Jahrbuch für Wirtschaftswissenschaften 52, 2001, S. 243-263. ? Br?uninger, Michael & Justus Haucap, Was ?konomen lesen und sch?tzen: Ergebnisse einer Umfrage, Nr. 107 (2000), erschienen in: Perspektiven der Wirtschaftspolitik 2, 2001, S.185-210. ? Haucap, Justus, Uwe Pauly & Christian Wey, Collective Wage Setting When Wages Are Generally Binding: An Antitrust Perspective, Nr. 106 (2000), erschienen in: International Review of Law and Economics 21, 2001, S. 287-307. ? Haucap, Justus, Selective Price Cuts and Uniform Pricing Rules in Network Industries, Nr. 105 (2000). ? Br?uninger, Michael, Unemployment Insurance, Wage Differentials and Unemployment, Nr. 104 (2000) erschienen in: Finanzarchiv 75, 2000, S. 485-501. ? Kruse, J?rn, Universaldienstlast etablierter Postunternehmen, Nr. 103 (2000) erschienen in: Zeitschrift für Betriebswirtschaft, Erg?nzungsheft 3, 2002, S. 99-117. ? Kruse, J?rn, Sportveranstaltungen als Fernsehware, Nr. 102 (2000) erschienen in: Schellhaa?, Horst-Manfred (Hg.), Sportveranstaltungen zwischen Liga- und Medien-Interessen, Schorndorf 2000, S. 15-39. Frühere Diskussionsbeitr?ge aus dem Institut für Theoretische Volkswirtschaftslehre ? Br?uninger, Michael, Social Capital and Regional Mobility, Nr. 4/2002. ? Sch?fer, Wolf, EU-Erweiterung: Anmerkungen zum Balassa-Samuelson-Effekt, Nr. 3/2002. ? Br?uninger, Michael, The Budget Deficit, Public Debt and Endogenous Growth, Nr. 2/2002. ? R?sl, Gerhard, Die Umverteilung der Geldsch?pfungsgewinne im Eurosystem: Das Earmarking- Verfahren seit dem 1.1.2002, Nr. 1/2002, als Kurzform erschienen in: Wirtschaftsdienst 82, 2002, S.352-356. ? Schniewindt, Sarah, Two-Way Competition in Local Telecommunication Networks, Nr. 2/2001. ? Reither, Franco, Optimal Monetary Policy when Output Persists: On the Equivalence of Optimal Control and Dynamic Programming, Nr. 1/2001. ? Sch?fer, Wolf, MOEL-Wechselkursarrangements, Nr. 1/2000, erschienen in: Günther Engel & Peter Rühmann (Hg.): Geldpolitik und Europ?ische W?hrungsunion, G?ttingen 2000, S.217-228. ? Heppke, Kirsten, On the Existence of the Credit Channel in Poland, Nr. 8/1999. ? Br?uninger, Michael, Unemployment and International Lending and Borrowing in an Overlapping Generations Model, Nr. 8/1999. ? Henning, Andreas & Wolfgang Greiner, Organknappheit im Transplantationswesen - L?sungsans?tze aus ?konomischer Sicht, Nr. 7/1999. ? Chung, Un-Chan, East Asian Economic Crisis - What is and What Ought to be Done: The Case of Korea, Nr. 6/1999, erschienen in: Research in Asian Economic Studies 10, 2002, S. 93-121. ? Carlberg, Michael, Europ?ische W?hrungsunion: Der neue Policy Mix, Nr. 5/1999, erschienen in Wirtschaftswissenschaftliches Studium (WiSt) 29(1), 2000, S. 8-13. ? Carlberg, Michael, European Monetary Union: The New Macroeconomics, Nr. 4/1999, erschienen in: Gerhard Rübel (Hg.), Real and Monetary Issues of International Economic Integration, Berlin 2000, S. 155-175. ? Br?uninger, Michael und J.-P. Vidal, Private versus Financing of Education and Endogenous Growth, Nr. 3/1999, erschienen in: Journal of Population Economics 13, 2000, S. 387-401. ? Reither, Franco, A Monetary Policy Strategy for the European Central Bank, Nr. 2/1999 erschienen in: Rolf Caesar und Hans-Eckart Scharrer (Hg.), European Economic and Monetary Union: Regional and Global Challenges, Baden-Baden 2001, S. 213-226. ? Br?uninger, Michael, Wage Bargaining, Unemployment and Growth, Nr. 1/1999 erschienen in: Journal of Institutional and Theoretical Economics 156, 2000, S. 646-660. Frühere Diskussionsbeitr?ge zur Finanzwissenschaft ? Josten, Stefan, Crime, Inequality, and Economic Growth. A Classical Argument for Distributional Equality, 2002, erscheint in: International Tax and Public Finance, 2003. ? Zimmermann, Klaus W. & Tobias Thomas, ?ffentliche Güter, natürliche Monopole und die Grenze marktlicher Versorgung, 2002, erscheint in: Wirtschaftswissenschaftliches Studium (WiSt) 32, 2003. ? Holm-Müller, Karin & Klaus W. Zimmermann, Einige Anmerkungen zur Internalisierungs- strategie mit dem produktorientierten Konzept der Pigousteuer, 2002, erschienen in: Zeitschrift für Umweltpolitik und Umweltrecht 25, 2002, S. 415-420 ? Josten, Stefan, Nationale Schuldenpolitik in der EWU, 2002, erschienen in: Wirtschaftsdienst 82, 2002, S. 219-225. ? Hackmann, Johannes, Der Sonderabgabenbezug nach dem Lebenspartnerschaftserg?nzungsgesetz, 2002, erschienen in: Wirtschaftsdienst, 82, 2002, S. 241-248. ? Josten, Stefan, Das Theorem der Staatsschuldneutralit?t. Eine kritisch-systematische Re- konstruktion, 2001, erschienen in: Jahrbuch für Wirtschaftswissenschaften 53, 2002, S. 180-209. ? Zimmermann, Klaus W., Komplikationen und Fallstricke in der Pigou-Analyse von Externalit?ten, 2001, erschienen in: Jahrbuch für Wirtschaftswissenschaften 53, 2002, S. 245-267 ? Josten, Stefan, National Debt in an Endogenous Growth Model, 2001, erschienen in: Jahrbuch für Wirtschaftswissenschaften 53, 2002, S. 107-123. ? Hackmann, Johannes, Vom Ehegattensplitting zum Partnerschaftssplitting?, 2001, erschienen in: Volker Arnold (Hg.), Wirtschaftsethische Perspektiven VI, Schriften des Vereins für Social- politik 228/VI, 2002, S. 189-222. ? Zimmermann, Klaus W. & Tobias Just, Politische Glaubwürdigkeit und der Euro: Eine verfassungs?konomische Perspektive, 2000, erschienen in: Fritz S?llner & Arno Wilfert (Hg.), Die Zukunft des Steuer- und Sozialstaates, Physica, 2001, S. 373-397. ? Josten, Stefan, National Debt, Borrowing Constraints, and Human Capital Accumulation in an Endogenous Growth Model, 2000, erschienen in: FinanzArchiv 58, 2001, S. 317-338. ? Zimmermann, Klaus W. & Tobias Just, The Euro and Political Credibility in Germany, 2000, erschienen in: Challenge 44, 2001, S. 102-120 ? Josten, Stefan, Public Debt Policy in an Endogenous Growth Model of Perpetual Youth, 1999, erschienen in FinanzArchiv 57, 2000, S. 197-215. ? Zimmermann, Klaus W., Internalisierung als Nirwana-Kriterium der Umweltpolitik, 1999, erschienen in: Kilian Bizer, Bodo Linscheidt & Achim Truger (Hg.), Staatshandeln im Umweltschutz. Perspektiven einer institutionellen Umwelt?konomik, Duncker & Humblot, 2000 ? Hackmann, Johannes, Die unterlassene Besteuerung der Nutzungswerte selbstgenutzten Wohnungseigentums: Vergebene Reformpotentiale, 1999, erschienen in: R. Lüdeke, W. Scherf & W. Steden (Hg.), Wirtschaftswissenschaft im Dienste der Verteilungs-, Geld- und Finanzpolitik, Festschrift für A. Oberhauser, Berlin 2000, S. 387-412. ? Zimmermann, Klaus W. & Tobias Just, Interest Groups, Referenda, and the Political Process: On the Efficiency of Direct Democracy, 1999, erschienen in: Constitutional Political Economy 11, 2000, S. 147-163 ? Josten, Stefan, Staatsverschuldung und Wirtschaftswachstum in einem Diamond-OLG-Modell mit AK-Technologie, 1999, erschienen in: Jahrbuch für Wirtschaftswissenschaften 51, 2000, S. 237- 254.