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Market Power & Reciprocity Among Vertically Integrated Cable Providers

By Jeffery Shih-kai Shen

This paper seeks to investigate the effects of vertical integration on the cable industry. There are two main goals that the research paper will attempt to address. The first is to build upon existing research on favoritism shown by multichannel video programming distributors (MVPDs) to affiliated video programming networks. Second, the paper will use 2007 and 2010 industry data to investigate the possible existence of “quid pro quo” among vertically integrated MVPD cable providers. After evaluating the data with multivariate OLS Regressions, the evidence suggests that MVPD cable providers do tend to carry their own affiliated programming networks. Furthermore, the evidence supports the hypothesis that reciprocity relationships exist among major vertically integrated cable providers.

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JEL Codes: C01, D22, K21 | Tagged: Cable Provider, Empirical Analysis, Programming Distributor, Programming Network, Vertical Integration

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