Veranstalter: Österreichisches Institut für Wirtschaftsforschung
Online seit: 13.04.2023 0:00
We consider a market environment with a monopoly ad blocker that offers whitelisting to two publishers. Advertisers post ads
on the publishers websites to attract the attention of consumers (who visit both publishers). Since advertisers are competing
in the marketplace, an advertiser may have an incentive to foreclose its competitor through excessive advertising. We fully
characterise the equilibrium in which ad blocker, publishers, and advertisers make strategic pricing decisions. Under some
conditions, the ad blocker profitably sells whitelisting to one publisher and both publishers are strictly better off than
without the ad blocker. Under other conditions, not only publishers but also either advertisers or consumers are worse off.