Multimarket contact and pricing: Evidence from the U.S. cement industry

AbstractThis paper examines the effects of multimarket contact on advertising prices in the U.S. radio broadcasting industry. While it is in general difficult to measure the effect of multimarket contact on competition, the 1996 Telecommunications Act substantially relaxed local radio ownership restrictions, giving rise to a major and exogenous consolidation wave. Between the years of 1995 to 1998, the average extent of multimarket contact in major U.S. media markets increased by 2.5 times. Importantly, the extent of change in multimarket contact varies across markets, and the change in multimarket contact varies separately from the change in concentration. Using a panel data set on 248 geographic U.S. radio broadcast markets, 1995-1998, we find that multimarket contact has little effect on advertising prices. This paper contributes to the empirical literature on multimarket contact by analyzing a different industrial context and using longitudinal data surrounding an ownership deregulation.

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A Micro-Econometric Model of Capital Utilization and Retirement: The Case of the U.S. Cement Industry

The Review of Economic Studies ◽

10.2307/2297955 ◽

1992 ◽

Vol 59 (2) ◽

pp. 277 ◽

Cited By ~ 33

Author(s):

Sanghamitra Das

Keyword(s):

Econometric Model ◽

Cement Industry ◽

Capital Utilization ◽

The U.S

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Pricing of First-Run Movies in Small U.S. Metropolitan Areas: Multimarket Contact and Chain Effects

The B E Journal of Economic Analysis & Policy ◽

10.1515/bejeap-2014-0070 ◽

2015 ◽

Vol 15 (1) ◽

pp. 285-297

Author(s):

Robert M. Feinberg

Keyword(s):

Small Group ◽

Metropolitan Areas ◽

Population Characteristics ◽

Multimarket Contact ◽

Movie Theaters ◽

Movie Theater ◽

Limited Applicability ◽

Telecommunications Industries ◽

The U.S

Abstract In recent years, the role of multimarket contact (MMC) among firms in influencing market performance has been studied for a relatively small group of industries – with banking and airlines most often examined, though the cement and telecommunications industries have been studied as well. This paper investigates this issue for the local movie theater industry in the U.S., one not previously studied in this regard. In small U.S. metropolitan areas, there is considerable variation in the nature of MMC among theater chains (large and small), which allows us to examine whether MMC among firms has an impact on movie pricing in these smaller markets. Data on movie pricing, market structure, and income and population characteristics are obtained for 118 multi-screen first-run movie theaters in 79 small metropolitan areas – those with under 250,000 people – which are not part of larger “consolidated” metropolitan areas. Analysis provides evidence supportive of MMC effects but suggestive of its limited applicability.

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