Hotelling competition and political differentiation with more than two newspapers

We analyse a newspaper market where media …rms compete for advertising as well as for readership. Firms …rst choose the political position of their newspaper, then set cover prices and advertising tari¤s. We build on the duopoly work in two-sided markets of Gabszewicz, Laussel, and Sonnac (2001, 2002) who show that advertising …nancing can lead to minimum political di¤erentiation. We extend their model to more than two …rms and show that concerns for the emergence of a Pensée Unique as a result of advertising …nancing increase as the number of …rms increases. In a simulation exercise we derive equilibrium locations and the welfare implications of an asymmetric shock as motivated by the empirical …ndings in Behringer and Filistrucchi (2010b).