Bias figures long_new

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					    Monopoly power Monopoly power is Monopoly power is
    is advantageous. disadvantageous. neutral.


1




ρ

                                         ~
                                         ρ(Α,β,π)




0                 _
    0             β           ρ                      1

           Citizen preference parameter, β.


Figure 1: The Suspicion Effect: When is Monopoly
Advantageous Relative to Competition?
                −3
          x 10
      3


    2.5


      2


    1.5
∆(β,π)

      1


    0.5


      0


   −0.5


    −1


   −1.5
    0.9
          0.8
                 0.7                                                                                                0.8
                       0.6                                                                                    0.7
                                                                                                        0.6
                                 0.5
                                                                                                  0.5
                                       0.4                                                  0.4
                                             0.3                                  0.3
                                                                           0.2
                                                   0.2
                             ¡




                                                                    0.1
                                                         0.1   0
                                                                                         




                                        Figure 2: The Publisher’s Bargainning Surplus
     1


    0.9


    0.8


    0.7       A Monopoly
                                                      Competition                          B Monopoly


    0.6


    0.5
π




    0.4


    0.3


Both A as well as B monopoly is equilibrium
   0.2


    0.1                                               No Entry


     0
          0     0.1         0.2       0.3       0.4        0.5       0.6     0.7      0.8        0.9    1
                                                            β
                      Figure 3: Equilibrium Market Structure Without Mergers−Dominant Profit Motive
     1
          B enters for buyout                                                            A enters for buyout

    0.9                                                 competition
                                                        changes
                                                        to monopoly
    0.8


    0.7

              A Monopoly                                                                    B Monopoly
    0.6


    0.5
π




                                                        Competition
    0.4


    0.3


  0.2
Both A as well as B monopoly are equilibrium

    0.1                                                 No Entry


     0
          0       0.1         0.2       0.3       0.4        0.5       0.6      0.7     0.8        0.9         1
                                                              β
                        Figure 4: Equilibrium Market Structure Allowing Mergers− Dominant Profit Motive
                                            Figure 5: The Suspicion Region
                                                                 betabar
     1                                                             0.5       0
                                                                                 0
          ¨ ¨ (  ¦
      87%6(543$21¤¤¨0§¤ & ¢
         ¨ ¦ $   ¤
()'¤¤©§¤ & ¢ %§"#!¨¤¨©¦§¤¥£   ¡  
                                        ¢
                                                                                 0.5
                                                                                       π(betabar)




                                                                                 1
     1


    0.9                                                No
                                                       Equilibrium
                                                       In Pure
    0.8                                                Strategies


    0.7

                                Competition
                                                                           Competition
    0.6


    0.5
π




    0.4


    0.3


    0.2       A                                                                                      B
              Monopoly                                                                               Monopoly

    0.1
               No Entry                   B Monopoly            A Monopoly                     No Entry

     0
          0        0.1    0.2       0.3        0.4        0.5        0.6        0.7      0.8        0.9         1
                                                           β
                                           Figure 6: Alpha=1, no mergers allowed
     1


    0.9


    0.8


    0.7 A Monopoly             Competition                                              B Monopoly


    0.6


    0.5
π




    0.4


    0.3


    0.2
              No Entry                                                                  No Entry
    0.1


     0
          0    0.1       0.2     0.3         0.4      0.5       0.6      0.7      0.8      0.9       1
                                                       β
                                       Figure 7: Alpha=0.05, no mergers allowed
     1


    0.9                    Competition


    0.8


    0.7

                                                    No
    0.6                                             Equlibrium
                                                    in Pure
              A Monopoly                            Strategies                     B
    0.5                                                                            Monopoly
π




    0.4


    0.3


    0.2


    0.1
                                   No Entry

     0
          0     0.1        0.2     0.3        0.4      0.5       0.6   0.7   0.8        0.9   1
                                                        β
               Figure 8: Alpha=0.01, no mergers allowed
     1


    0.9


    0.8                                              Competition


    0.7
                A Monopoly
                                                                                       B
    0.6
                                                                                       Monopoly


    0.5
π




    0.4


    0.3
          No Equilibrium In
           Pure Strategies
    0.2


    0.1                                             No Entry


     0
          0      0.1          0.2   0.3       0.4       0.5      0.6       0.7   0.8      0.9     1
                                                         β
                                    Figure 9: Alpha=0.001, no mergers allowed
     1


    0.9
                                 B enters for buyout                 A enters for buyout

    0.8


    0.7
                                                                                                 B monopoly
              A monopoly
                                              Competition
    0.6


    0.5
π




    0.4


    0.3


    0.2
                                                                                                    No Entry
              No Entry
    0.1


     0
          0       0.1      0.2       0.3        0.4        0.5      0.6       0.7          0.8      0.9        1
                                                            β
                                                       Fig 10: Alpha=1, mergers allowed
                                                                 Outcome changes to B monopoly
                        Outcome changes to A monopoly
     1


    0.9

                                                                   A enters for buyout
    0.8                            B enters for buyout


    0.7


    0.6
                                    Competition                         Competition

              A Monopoly
    0.5
π




                                                                                               B Monopoly

    0.4


    0.3


    0.2
                 No Entry                                                                  No Entry

    0.1


     0
          0       0.1        0.2      0.3         0.4      0.5      0.6       0.7        0.8     0.9        1
                                                            β
                                              Figure 12: Alpha= 0.05, mergers allowed
                       B enters for buyout                            A enters for buyout
     1


    0.9
                              Outcome changes to A monopoly

    0.8
                                                            Outcome changes to B monopoly

    0.7
                                  Competition
              A Monopoly                                                                          B Monopoly
    0.6


    0.5
π




    0.4


    0.3


    0.2


    0.1                                                  No Entry


     0
          0      0.1        0.2       0.3         0.4       0.5       0.6      0.7          0.8        0.9     1
                                                             β
                                             Figure 13: Alpha= 0.001, mergers allowed

				
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