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Competition Between Networks: A�Study of the Market for Yellow�Pages

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  • Marc Rysman

Abstract

This paper estimates the importance of network effects in the market for Yellow Pages. I estimate three simultaneous equations: consumer demand for usage of a directory, advertiser demand for advertising and a publisher's first-order condition (derived from profit-maximizing behaviour). Estimation shows that advertisers value consumer usage and that consumers value advertising, implying a network effect. I find that internalizing network effects would significantly increase surplus. As an application, I consider whether the market benefits from monopoly (which takes advantage of network effects) or oligopoly (which reduces market power). I find that a more competitive market is preferable. Copyright The Review of Economic Studies Limited, 2004.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of Economic Studies.

Volume (Year): 71 (2004)
Issue (Month): 2 (04)
Pages: 483-512

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Handle: RePEc:bla:restud:v:71:y:2004:i:2:p:483-512

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  1. The Economics of Maps
    by Peter Klein in Organizations and Markets on 2006-11-17 22:10:13
  2. Nothing New Under the Sun
    by Peter Klein in Organizations and Markets on 2006-09-14 15:44:58
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