IDEAS home Printed from https://ideas.repec.org/a/eee/indorg/v79y2021ics0167718721000229.html
   My bibliography  Save this article

Simulating media platform mergers

Author

Listed:
  • Ivaldi, Marc
  • Zhang, Jiekai

Abstract

The empirical analysis of media platforms economics has often neglected the multi-homing behaviour of advertisers. Assuming away the cross-substitutability and/or complementarity between the advertising slots of different platforms could damage the quality and the robustness of counterfactual analysis. To evaluate the consequence of such an abstraction, we compare the simulation results of hypothetical platform mergers when the demand on the advertising side is derived from a Translog cost model which allows for multi-homing, and when it is approximated by using a simple log-linear inverse demand model that ignores the differentiation among media platforms’ advertising slots. Ignoring the existence of substitutes or complements on the advertising side would result in overpredicting the losses of the viewers’ surplus and in underpredicting the gains in platforms’ revenues.

Suggested Citation

  • Ivaldi, Marc & Zhang, Jiekai, 2021. "Simulating media platform mergers," International Journal of Industrial Organization, Elsevier, vol. 79(C).
    • Handle: RePEc:eee:indorg:v:79:y:2021:i:c:s0167718721000229
    DOI: 10.1016/j.ijindorg.2021.102729
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0167718721000229
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijindorg.2021.102729?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Ying Fan, 2013. "Ownership Consolidation and Product Characteristics: A Study of the US Daily Newspaper Market," American Economic Review, American Economic Association, vol. 103(5), pages 1598-1628, August.
    2. Marc Rysman, 2004. "Competition Between Networks: A Study of the Market for Yellow Pages," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 71(2), pages 483-512.
    3. Ivaldi, Marc & Zhang, Jiekai, 2020. "Platform Mergers: Lessons from a Case in the Digital TV Market," CEPR Discussion Papers 14895, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Affeldt, P. & Argentesi, E. & Filistrucchi, Lapo, 2021. "Estimating Demand with Multi-Homing in Two-Sided Markets," Other publications TiSEM 1317bf39-d02e-4f61-a34f-e, Tilburg University, School of Economics and Management.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marc Ivaldi & Jiekai Zhang, 2021. "Simulating media platform mergers," Post-Print hal-03472984, HAL.
    2. Ivaldi, Marc & Zhang, Jiekai, 2021. "Simulating media platform mergers," TSE Working Papers 21-1208, Toulouse School of Economics (TSE).
    3. Affeldt, P. & Argentesi, E. & Filistrucchi, Lapo, 2021. "Estimating Demand with Multi-Homing in Two-Sided Markets," Other publications TiSEM 1317bf39-d02e-4f61-a34f-e, Tilburg University, School of Economics and Management.
    4. Ginger Zhe Jin & Marc Rysman, 2015. "Platform Pricing at Sports Card Conventions," Journal of Industrial Economics, Wiley Blackwell, vol. 63(4), pages 704-735, December.
    5. Ivaldi, Marc & Zhang, Jiekai, 2020. "Platform Mergers: Lessons from a Case in the Digital TV Market," CEPR Discussion Papers 14895, C.E.P.R. Discussion Papers.
    6. Charles Angelucci & Julia Cagé, 2019. "Newspapers in Times of Low Advertising Revenues," American Economic Journal: Microeconomics, American Economic Association, vol. 11(3), pages 319-364, August.
    7. Anderson, Simon P. & Peitz, Martin, 2020. "Media see-saws: Winners and losers in platform markets," Journal of Economic Theory, Elsevier, vol. 186(C).
    8. Aguirregabiria, Victor & Clark, Robert & Wang, Hui, 2019. "The Geographic Flow of Bank Funding and Access to Credit: Branch Networks, Local Synergies, and Competition," CEPR Discussion Papers 13741, C.E.P.R. Discussion Papers.
    9. Patrick Cayseele & Stijn Vanormelingen, 2019. "Merger Analysis in Two-Sided Markets: The Belgian Newspaper Industry," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 54(3), pages 509-541, May.
    10. repec:hal:spmain:info:hdl:2441/4edekc99or8n2bu86nu4ua8adl is not listed on IDEAS
    11. repec:hal:spmain:info:hdl:2441/26t617gatp86qree1dejcpchbr is not listed on IDEAS
    12. Bruno Jullien & Alessandro Pavan & Marc Rysman, 2021. "Two-sided markets, pricing, and network effects," Post-Print hal-03828345, HAL.
    13. Charles Angelucci & Julia Cage & Michael Sinkinson, 2020. "Media Competition and News Diets," Sciences Po publications 2020-03, Sciences Po.
    14. Charles Angelucci & Julia Cage & Michael Sinkinson, 2020. "Media Competition and News Diets," SciencePo Working papers hal-03393063, HAL.
    15. Julian Hidalgo & Michelle Sovinsky, 2023. "Internet (Power) to the People: How to Bridge the Digital Divide," CRC TR 224 Discussion Paper Series crctr224_2023_461, University of Bonn and University of Mannheim, Germany.
    16. Aryal, Gaurab & Gabrielli, Maria F., 2020. "An empirical analysis of competitive nonlinear pricing," International Journal of Industrial Organization, Elsevier, vol. 68(C).
    17. Federico Boffa & Lapo Filistrucchi, 2014. "Optimal Cartel Prices in Two-Sided Markets Access," Working Papers 14-19, NET Institute.
    18. Matthew Gentzkow & Jesse M. Shapiro & Michael Sinkinson, 2014. "Competition and Ideological Diversity: Historical Evidence from US Newspapers," American Economic Review, American Economic Association, vol. 104(10), pages 3073-3114, October.
    19. Steven Berry & Philip Haile, 2016. "Identification in Differentiated Products Markets," Annual Review of Economics, Annual Reviews, vol. 8(1), pages 27-52, October.
    20. S. Sriram & Puneet Manchanda & Mercedes Bravo & Junhong Chu & Liye Ma & Minjae Song & Scott Shriver & Upender Subramanian, 2015. "Platforms: a multiplicity of research opportunities," Marketing Letters, Springer, vol. 26(2), pages 141-152, June.
    21. Adithya Pattabhiramaiah & S. Sriram & Shrihari Sridhar, 2018. "Rising Prices Under Declining Preferences: The Case of the U.S. Print Newspaper Industry," Marketing Science, INFORMS, vol. 37(1), pages 97-122, January.
    22. Marc Rysman, 2019. "The reflection problem in network effect estimation," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(1), pages 153-158, January.

    More about this item

    Keywords

    Two-sided market; Platform merger; Advertising; TV market; Competition policy;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:indorg:v:79:y:2021:i:c:s0167718721000229. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505551 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.