Spatial Competition Flashcards
Allogory used to explain the hotelling theory - explain
hot dog carts on a beach
According to the hotelling theory, what happens when both actors are at the center?
They reach equilibrium
Why is equilbrium bad?
people at the far end of the spectrum won’t act at all
What is the ideal spacing in the hotelling theory?
Unstable equilbirum - evenly spaced
How does the hotelling theory view monopoly?
-With spatial variation, monopoly can cause more product variety than competition
-monopolies can have seperate divisions that appeal to a different set of customers
Median Voter Theorem
Both political parties will position themselves close to the ideological center
Fault in median voter theorem
Primaries, party preferences, and volunteers push political candidates to extremes
With median voter theorem, what happens once the parties are pushed to the extremes?
A candidate will position themselves closer to the center by co-opting many issues
e.g. Bill Clinton ran as centrist and George Bush
if your candidate is a centrist, you have to be one too to have a chance
What is radio station’s current dilemma?
trying to decide which type of music to play when listeners are on a continuum of pop, country, and hip hop
What is radio station’s equilibirum?
Pop
but country and hip hop fans don’t have anything to listen to
*What happened when Congress deregulated strict anti-trust policies for radio in 1966?
shift from a decentralized industry to a centralized industry with one company (Clear Channel) owning about 10% of all US radio stations
What course of action did Clear Channel take?
would purchase multiple stations in a town in order to play different types of music (country-pop and hip hop-pop)
What did Berry and Waldfogel argue occured after deregulation of radio?
There were more genres of radio
Actors and their views on deregulation
FCC and National Association of Broadcasters favored deregulation, while The Future of Music Coalition was opposed
What was Pete DiCola of The Future of Music Coalition’s argument for being opposed to deregulation?
-argued that distinctions are nominal, so more formats doesn’t mean more variety
-however, research by Sweeting showed that there was actually more variety after deregulation
*What does the discourse around radio deregulation indicate?
Policy actors can support researchers they expect will provide favorable results
