This chapter focuses on the economic mechanisms at work in recent models of advertising finance in media markets developed around the concept of two-sided markets. The objective is to highlight new and original insights from this approach, and to clarify the conceptual aspects. The chapter first...

We study the relation between ad networks, consumer privacy and the online advertising market. We consider two publishers that can outsource their ad inventories to an ad network, in a market where consumers and advertisers endogenously multi-home. Differently from publishers, the ad network...

We study the relation between ad networks, consumer privacy and the online advertising market. We consider two publishers that can outsource their ad inventories to an ad network, in a market where consumers and advertisers endogenously multi-home. Differently from publishers, the ad network...

We model a two-sided market with heterogeneous customers and two heterogeneous network effects. In our model, customers on each market side care differently about both the number and the type of customers on the other side. Examples of two-sided markets are online platforms or daily newspapers....

We study targeted information in a duopoly model with differentiated products, allowing for consumers with limited attention. The presence of inattentive consumers incentivizes firms to behave as if they were mass-advertisers, despite their ability to direct their messages precisely towards...

We analyze markets where firms competing on price advertise to increase the probability of entering consumers' consideration sets. We find that moderately costly advertising allows firms to raise prices and possibly profits by reducing the fraction of price-conscious consumers, and by segmenting...

Internet users often surf to multiple websites in order to accomplish a single task. When this happens, do these different sites face the right incentives when choosing their advertising policies? We build a model showing that websites are prone both to over-advertise and to misallocate ads...

This paper explores the strategic tradeoff between advertising and pricing when firms have asymmetric loyal market segments and also can compete for shoppers who purchase at the lowest advertised price. Two advertising structures consistent with real world settings are considered. In the first...

We focus on four important features of mobile targeting. First, consumers' real-time locations are known to sellers. Second, location is not the only factor determining how responsive consumers are to discounts. Other factors such as age, income and occupation play a role, which are imperfectly...

We examine the implications of limited consumer attention for the targeting decisions of competing firms. Limited attention alters the strategic role of information provision as firms may become incentivized to behave as mass advertisers, despite perfect targeting abilities. We analyze the...