Internet Use, Competition, and Geographical Rescoping in Yellow Pages Advertising

Abstract This paper examines the effect of Internet penetration on competition and prices in the market for Yellow Pages advertising. We find that the diffusion of the Internet is associated with a decrease in the number of competitors and average prices for printed advertisements in the long-run. However, the decrease in prices is attenuated by increasing market concentration as firms exit and by geographic rescoping as remaining firms repositioned their products.