We consider a model of daily newspapers? competition to test the
validity of the so called ?theory of the circulation spiral?. According
to it, the interaction between the newspapers and the advertising markets
drives the newspaper with the smaller readership into a vicious
circle, finally leading it to death. In a model with two newspapers,
we show that, contrary to this conjecture, the dynamics envisaged by
the proposers of the theory, does not always lead to the elimination
of one of them.
05/11/2005
myEcon Newsletter
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