Illustrate what the likely bargaining negotiating outcome

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Reference no: EM1391136

Q. Two equal size newspapers have overlap circulation of 10% (10% of the subscription subscribe to both newspapers). Advertisers are willing to pay $10to advertise in one newspaper but only $19 to advertise in both, because they're unwilling to pay twice to reach the same subscriber. Illustrate what's the likely bargaining negotiating outcome if the advertisers bargain by telling each newspaper which they're going to reach agreement with the other newspaper, so the gains to reaching agreement are only $9? Assume the two newspapers merge. Illustrate what is the likely post- merger bargaining outcome?

Reference no: EM1391136

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