16-3 Newspaper BargainingTwo equal-sized newspapers have overlap circulation of 10%(10%of the subscribers subscribe toboth newspapers). Advertisers are willing to pay $10 to advertise in one newspaper but only $19to advertise in both, because they’re unwilling to pay twice to reach the same subscriber. What’sthe likely bargaining negotiation outcome if the advertisers bargain by telling each newspaper thatthey’re going to reach agreement with the other newspaper, so the gains to reaching agreement areonly $9? Suppose the two newspapers merge.What is the likely post-merger bargaining outcome?
Two equal-sized newspapers have overlap circulation of 10% (10% of the subscribers subscribe toboth newspapers). Advertisers are willing to pay $10 to advertise in one newspaper but only $19 to…
