Essays in Industrial Organization

Abstract

This dissertation consists of two self-contained papers that explore the Industrial Organization of the UK television broadcasting market and broadband procurement by US K-12 schools Chapter 1: Welfare Effects of Competition in the UK Television Broadcasting Market In this chapter, I study the consumer welfare effects of a regulation that ended the exclusivity of telecast rights of live English Premier League games and induced entry into the UK television broadcasting market. Historically rights were owned by a single broadcaster. The regulation divided the games into mutually exclusive bundles and stipulated that a single broadcaster cannot own rights to all of them. This resulted in a new channel entering the market and showing some games. I estimate a model of household viewing preferences, channel subscription demand, and pricing using proprietary viewing and subscription choice data. Simulations show a 6.4\% (\pounds 10m per season) decline in consumer surplus driven by the higher prices consumers had to pay to view all the live games. This offset increased surplus from new content on the entrant channel. I propose an alternate regulation that breaks the exclusivity of games telecast on a channel and show that the estimated surplus could have been 29\% higher. Chapter 2: Bundling Demand in K-12 Broadband Procurement In this chapter coauthored with Gaurab Aryal, Charles Murry and Pallavi Pal, we evaluate the effects of bundling demand for broadband internet by K-12 schools. In 2014, New Jersey switched from decentralized procurements to a new procurement system that bundled schools into four regional groups. Using an event study approach, we find that, on average, prices for participants decreased by one-third, and broadband speed purchased increased sixfold. We bound the change in school expenditures due to the program and find that participants saved at least as much as their total ``E-rate" subsidy from the federal government. Under weak assumptions on demand, we show that participating schools experienced large welfare gains. Using an informal model and simulations, we analyze the main mechanisms that could lead to lower prices in the regional auctions.