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Does advertising lower the price of newspapers to consumers? A theoretical appraisal

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  • GABSZEWICZ, Jean J.
  • LAUSSEL, Didier
  • SONNAC, Nathalie

Abstract

We study whether advertising subsidizes consumers newspapers, prices. Using a model representingthe two-sided network effects between the advertising and printed media industries, we show that theanswer should be nuanced according to the readership,s attitude toward advertising.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers RP with number -1760.

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Handle: RePEc:cor:louvrp:-1760

Note: In : Economics Letters, 87, 127-134, 2005
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  1. Jean-Charles Rochet & Jean Triole, 2002. "Platform Competition in Two Sided Markets," FMG Discussion Papers dp409, Financial Markets Group.
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Cited by:
  1. Kind, Hans Jarle & Nilssen, Tore & Sørgard, Lars, 2005. "Financing of Media Firms: Does Competition Matter?," Memorandum 01/2005, Oslo University, Department of Economics.
  2. Bühler, Stefan & Halbheer, Daniel, 2011. "Persuading Consumers With Social Attitudes," Economics Working Paper Series 1117, University of St. Gallen, School of Economics and Political Science.
  3. Filistrucchi, L. & Antonielli, M., 2012. "Collusion and the Political Differentiation of Newspapers," Discussion Paper 2012-024, Tilburg University, Center for Economic Research.
  4. Ramon Casadesus-Masanell & Feng Zhu, 2009. "Strategies to Fight Ad-sponsored Rivals," Working Papers 09-09, NET Institute, revised Sep 2009.
  5. Feng Zhu, 2008. "Ad-sponsored Business Models and Compatibility Incentives of Social Networks," Working Papers 08-20, NET Institute, revised Sep 2008.
  6. Lola Esteban & José Hernández, 2012. "Specialized advertising media and product market competition," Journal of Economics, Springer, vol. 106(1), pages 45-74, May.
  7. Stefan Buehler & Daniel Halbheer, 2011. "Selling when Brand Image Matters," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 167(1), pages 102-118, March.

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