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Prices and Network Eects in Two-Sided Markets: the Belgian Newspaper Industry

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Author Info

  • Van Cayseele, Patrick

    (Katholieke Universiteit Leuven, Belgium
    Universiteit Amsterdam, The Netherlands)

  • Vanormelingen, Stijn

    ()
    (Hogeschool-Universiteit Brussel (HUB), Belgium
    Katholieke Universiteit Leuven, Belgium)

Abstract

This paper investigates the two-sided nature of the newspaper industry. We explicitly take into account cross network eects that exist between advertisers and newspaper readers. On one side, advertisers.demand for publicity space depends on the number of newspaper readers and their characteristics. On the other side, readers. Demand can be, positively or negatively, in.uenced by the number of advertisements. In addition, editors may own several newspapers and hence a variety of cross-market eects that result from changes in market prices exist. To estimate demand parameters for both sides of the market, a speci.c structural model is needed that takes into account those eects. We estimate network eects and price elasticities for Belgian newspaper publishers to assess market power and the degree of competition in the market, which experienced a large consolidation wave over the last decades. This allows us to evaluate a recent merger in the Belgian newspaper industry.

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Bibliographic Info

Paper provided by Hogeschool-Universiteit Brussel, Faculteit Economie en Management in its series Working Papers with number 2009/06.

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Length: 36 pages
Date of creation: 26 Feb 2009
Date of revision:
Handle: RePEc:hub:wpecon:200906

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Web page: http://research.hubrussel.be
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Related research

Keywords: two-sided markets; newspapers; demand estimation;

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References

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  6. GABSZEWICZ, Jean J. & LAUSSEL, Didier & SONNAC, Nathalie, . "Press advertising and the political differentiation of newspapers," CORE Discussion Papers RP -1561, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  7. Kaiser, Ulrich & Wright, Julian, 2004. "Price Structure in Two-sided Markets: Evidence from the Magazine Industry?," ZEW Discussion Papers 04-80, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  8. Anderson, Simon P. & Gabszewicz, Jean J., 2006. "The Media and Advertising: A Tale of Two-Sided Markets," Handbook of the Economics of Art and Culture, Elsevier.
  9. Meghan R. Busse & Marc Rysman, 2001. "Competition and Price Discrimination in Yellow Pages Advertising," Yale School of Management Working Papers ysm207, Yale School of Management.
  10. Ambarish Chandra & Allan Collard-Wexler, 2009. "Mergers in Two-Sided Markets: An Application to the Canadian Newspaper Industry," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(4), pages 1045-1070, December.
  11. Chandra, Ambarish, 2008. "Targeted Advertising: The Role of Subscriber Characteristics in Media Markets," MPRA Paper 7955, University Library of Munich, Germany.
  12. Victor Ginsburgh & David Throsby, 2006. "Handbook of the Eonomics of Art and Culture," ULB Institutional Repository 2013/152412, ULB -- Universite Libre de Bruxelles.
  13. Patrick VAN CAYSEELE & Jo REYNAERTS, 2007. "Complementary platforms," Center for Economic Studies - Discussion papers ces0721, Katholieke Universiteit Leuven, Centrum voor Economische Studiën.
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Cited by:
  1. David Flath, 2012. "Japanese Newspapers," ISER Discussion Paper 0850, Institute of Social and Economic Research, Osaka University.
  2. David Flath, 2012. "Nonlinear Pricing of Japanese Newspapers," ISER Discussion Paper 0851, Institute of Social and Economic Research, Osaka University.
  3. David Flath, 2010. "Resale Price Maintenance by Japanese Newspapers," ISER Discussion Paper 0787, Institute of Social and Economic Research, Osaka University.

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