Edited by Robert G. Picard and Steve S. Wildman
Why include a chapter on trade in a book on media economics? The simplest answer is there is a literature to review. While it is not large, economists have been writing about trade in media products for over 25 years. But this begs the question of what makes it a subject worthy of serious investigation. Many thousands of goods and services are traded internationally, but relatively few have generated identifiable bodies of research. We argue below that our understanding of the economic forces that drive trade in various media products is far from complete and the challenges, both theoretical and empirical, that must be overcome to improve this understanding are of a type that is particularly interesting to economists. There is also the possibility that the conceptual advances required to improve our understanding of trade in media will have broader applications. For example, Rosse’s (1970) work on newspapers anticipated by over two decades key insights on pricing with interdependent demands now identified with the still relatively new literature on two-sided markets (or platforms). In their book on trade in computer software, Siwek and Furchtgott-Roth (1993) argue that domestic market size and scale advantages identified in early contributions by economists to the media trade literature (Waterman, 1988; Hoskins and Mirus, 1988; Wildman and Siwek, 1987, 1988) as critical to US producers’ success in the motion picture and television programme trades also help explain US firms’ success in the global software market.
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