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  3. American Economic Review
  4. June 2001
  5. Vertical Integration, Market Foreclosure, and Consumer Welfare in the Cable Television Industry

American Economic Review

ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)

Vertical Integration, Market Foreclosure, and Consumer Welfare in the Cable Television Industry

  • Tasneem Chipty
American Economic Review
vol. 91, no. 3, June 2001
(pp. 428–453)
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Abstract

I examine the effects of vertical integration between programming and distribution in the cable television industry. I assess the effects of ownership structure on program offerings, prices, and subscriptions, and I compare consumer welfare across integrated and unintegrated markets. The results of this analysis suggest two general conclusions. First, integrated operators tend to exclude rival program services, suggesting that certain program services cannot gain access to the distribution networks of vertically integrated cable system operators. Second, vertical integration does not harm, and may actually benefit, consumers because of the associated efficiency gains.

Citation

Chipty, Tasneem. 2001. "Vertical Integration, Market Foreclosure, and Consumer Welfare in the Cable Television Industry." American Economic Review, 91 (3): 428–453. DOI: 10.1257/aer.91.3.428

JEL Classification

  • L82 Entertainment; Media
  • L22 Firm Organization and Market Structure