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# Two equal sized newspapers have an overlap circulation of 10%.

Two equal sized newspapers have an overlap circulation of 10%. Advertisers are willing to pay \$15 to advertise in one newspaper but \$29 to advertise in both because they are unwilling to pay twice to reach the same subscriber. Suppose the advertisers bargain by telling each newspaper they are going to reach agreement with the other newspaper whereby pay the other newspaper \$14 to advertise. According to the non strategic view of bargaining each newspaper would earn _______of the \$14 in value added by reaching an agreement with the advertisers. The total gain for the two newspapers from reaching an agreement is ________. Suppose the two newspapers merge and can no longer bargain by telling each newspaper they can reach agreement with the other, thus the total gains for the two parties from reaching an agreement with the advertisers are \$14. According to the non strategic view of bargaining each merged newspaper will earn _____ in an agreement with the advertisers. The gain to the merged newspaper ________(less or greater ) than the total gains to the individual newspapers pre-merger.

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