FCC has recently been considering the issue of of of the broadcast media. This issue stems in part from the belief that the present degree of concentration adversely affects competition in the markets for time. This implies that the distribution of ownership affects the price of time, or stated differently, the price of TV audiences. FCC is mainly concerned with the substantial control of TV licenses by newspapers and radio stations in the same market areas, and with the extent of group ownership of stations particularly in the largest fifty markets where group ownership is felt to be excessive. As a result, it began to exercise its right to question license transfers and renewals which perpetuated or increased undue concentration of ownership, and in its 1965 policy statement indicated its intent to give greater weight to diversity of ownership when determining license grants through comparative hearings. Most concretely, the FCC has adopted a rule forbidding any party from holding more than one full-time broadcast license in any market. This rule did not require divestiture and under pressure from the Department of Justice, the FCC is now considering requiring licensees to reduce their holdings in any market to an AM-FM combination, a TV station or a newspaper. But in all these deliberations the underlying approach has been to assert that concentration is too great without specifying what adverse effects it has, or how changes in ownership would affect them. I first consider group ownership. fixed number of TV stations in a given market area might collude in order to restrict the supply of audiences or to facilitate price discrimination. I have found no evidence of discrimination in the sale of time.' Therefore, it is my view that collusion would only occur to restrict the supply of audiences. question then becomes what difference would group ownersip make, since in any given market, only one TV station can be owned by a single licensee. One could argue that group ownership reduces the costs of collusion and thus increases its likelihood. For example, group ownership increases the probability that in any market two or more firms meet in some other market. If collusion is more likely where an arrangement covers more *I thank Professor R. H. Coase and Richard 0. Zerbe for helpful comments. sources of information for this study are as follows: the 1967 market rankings, the number of TV stations by market in 1967, and the prices of time were obtained from Spot Television Rates and Data, Apr. 15, 1967, vol. 49, No. 4; the number, location and circulation of newspaper firms from Ayer Directory of Newspapers and Periodicals, 1968; audience sizes from American Research Bureau, Day-Part Television Audience Summary, Feb./Mar., 1967; the ownership of stations from Broadcasting Yearbook Issue, 1968 and Hearings on S. 1312 Before the Subcomm. on Antitrust and Monopoly of the Senate Comm. on the Judiciary, 90th Cong., 2d Sess., pt. 7, at 3303-60; the number of radio stations from Broadcasting, Feb. 10, 1969, at 45-59. All measures of the number of TV stations exclude, whereas audience measures for each TV station include, owned booster and satellite facilities. Because of the length of the original manuscript, it was cut by the editor. 1 See, Peterman, The Clorox Case and the Television Rate Structures, 11 J. Law & Econ. 321 (1968).

In a recent issue of this Reviewv, Nathaniel Leff examlined the role of demographic factors in the deternmination of aggregate savings rates, using, international cross-section data. His major conclusion was . that dependency ratios are a statistically distinct and quantitatively important influence on aggregate savings ratios, both for the 74 considered as a whole and within the subsets of developed and underdeveloped countries (pp. 893-94). In this note, we shall present evidence showing that, contrary to Leff's findings, dependency ratios play an insignificant role in determining savings rates in the majority of the underdeveloped countries. In a recent paper, I argued and showed that the treatment of underdeveloped as a single group is not very meaningful. In fact, very often such a treatment conceals more information than it reveals. It was then argued that a nmore satisfactory way is to subdivide these according to per capita income levels. Following the classification adopted in that paper, I divided the underdeveloped into three groups: (I) those with per capita income between $0-124; (II) those between $125-249; and (III) those between $250675.' Table 1 gives the identification of the in each group. Using Leff's data, we estimated his equations for each group separately and for the three groups combined together. The equations are:

The situation in which a seller is aware that his pricing policy will affect the probability of entry of competing suppliers is studied. The seller's optimal policy is developed under the assumption that the entry probability is a non-decreasing function of product and that the objective is present value maximization. It is shown that the optimal pre-entry tends to fall as the discount rate drops, the market growth rate rises, the post-entry profit possibilities decline, or certain non-price barriers to entry fall. ECONOMISTS HAVE LONG known that maximizing immediate profits is often not the optimal strategy for a firm to pursue if its planning horizon extends beyond the present. A policy for achieving the highest overall reward may dictate the sacrifice of some current gain. This point has played a central role in the development of the theory of a The theory deals with determination of the entrypreventing by a supplier of a market when potential entrants exist. The supplier in question may be a firm or a group of (tacitly) cooperating firms. The high short term profits associated with the pursuit of monopoly pricing must be balanced against the loss of long term profits upon entry of additional suppliers attracted by the high price. In an early paper formalizing the problem, Bain [2] defined the price as the highest that the established sellers can set without inducing entry. Modigliani [9] developed a graphical derivation of the limit and analyzed a number of its determinants. Fisher [6] related these results to Cournot's duopoly model. Recent contributors include Pashigian [10] and Dewey [5]. On the other side of the Atlantic, Harrod [7], in an attack on the doctrine of excess capacity, argued that a long-run profit maximizing firm would set to preclude entry. According to Hicks' [8] formalization of Harrod's argument, the firm seeks maximization of a weighted sum of short-run and long-run profits, with the relative weights reflecting the firm's attitudes regarding these periods. It follows from this that the firm may not set at its entry preventing level. Explicit criticism of the limit concept has not been lacking. Williamson [13], while extending the concept of a limit to a limit price-selling cost frontier, suggested that the deterministic framework be modified to a probabilistic one. In proposing a stochastic approach, he noted that the limit theory is highly rigid, with a single point or curve dividing certain entry from no entry. Williamson also observed that the assumed optimality of the limit implied that the firm would be willing to prevent entry at any cost. Stigler [12, p. 227] has pointed out that the attractiveness of entry will depend not only upon the current rate of return to the industry, but also upon the anticipated rate of growth of industry demand. If the latter is large, then the present value of future profits may be sufficiently large