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News Aggregators and Competition among Newspapers on the Internet

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  • Doh-Shin Jeon
  • Nikrooz Nasr

Abstract

This paper studies how news aggregators affect the quality choices of newspapers competing on the Internet. To provide a micro-foundation for the role of the aggregator, we build a model of multiple issues where newspapers choose their quality on each issue. Our model captures well the main trade-off between the "business-stealing" effect and the "readership-expansion" effect. We find that the aggregator increases the quality only if the readership-expansion effect is large enough relative to the business-stealing effect. Using a condition obtained from empirical results, we find that the aggregator increases the quality and social welfare, but affects newspapers' profits ambiguously.

Suggested Citation

  • Doh-Shin Jeon & Nikrooz Nasr, 2016. "News Aggregators and Competition among Newspapers on the Internet," American Economic Journal: Microeconomics, American Economic Association, vol. 8(4), pages 91-114, November.
    • Handle: RePEc:aea:aejmic:v:8:y:2016:i:4:p:91-114
    Note: DOI: 10.1257/mic.20140151
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    1. All hail news aggregators!
      by Economic Logician in Economic Logic on 2013-05-09 19:17:00

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    3. Alaoui, Larbi & Germano, Fabrizio, 2020. "Time scarcity and the market for news," Journal of Economic Behavior & Organization, Elsevier, vol. 174(C), pages 173-195.
    4. Lesley Chiou & Catherine Tucker, 2017. "Content aggregation by platforms: The case of the news media," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(4), pages 782-805, December.
    5. Charles Angelucci & Julia Cagé & Michael Sinkinson, 2022. "Media Competition and News Diets," Post-Print hal-03880088, HAL.
    6. Peitz, Martin & Reisinger, Markus, 2014. "The Economics of Internet Media," Working Papers 14-23, University of Mannheim, Department of Economics.
    7. Joan Calzada & Guillem Ordóñez, 2012. "Competition in the news industry: fighting aggregators with versions and links," Working Papers 12-22, NET Institute.
    8. Cagé, Julia, 2020. "Media competition, information provision and political participation: Evidence from French local newspapers and elections, 1944–2014," Journal of Public Economics, Elsevier, vol. 185(C).
    9. Julia Cage, 2017. "Media Competition, Information Provision and Political Participation: Evidence from French Local Newspapers and Elections, 1944-2014," SciencePo Working papers hal-03393164, HAL.
    10. Matthew Ellman & Tomás Rodríguez Barraquer, 2016. "Strategic grouping and search for quality journalism, online versus offline," Working Papers 16-21, NET Institute.
    11. Julia Cage, 2017. "Media Competition, Information Provision and Political Participation: Evidence from French Local Newspapers and Elections, 1944-2014," SciencePo Working papers Main hal-03393164, HAL.
    12. Jeon, Doh-Shin, 2018. "Economics of News Aggregators," TSE Working Papers 18-912, Toulouse School of Economics (TSE).
    13. Charles Angelucci & Julia Cagé & Michael Sinkinson, 2022. "Media Competition and News Diets," SciencePo Working papers Main hal-03880088, HAL.
    14. Joan Calzada & Ricard Gil, 2020. "What Do News Aggregators Do? Evidence from Google News in Spain and Germany," Marketing Science, INFORMS, vol. 39(1), pages 134-167, January.
    15. Tim Meyer & Anna Kerkhof & Carmelo Cennamo & Tobias Kretschmer, 2022. "Competing for Attention on Information Platforms: The Case of News," CESifo Working Paper Series 9832, CESifo.
    16. repec:hal:spmain:info:hdl:2441/478a1feno18otpdr60lclo4fuq is not listed on IDEAS
    17. Go, Geoffrey, 2021. "News Media, Digital Platforms and Content Sharing," Warwick-Monash Economics Student Papers 23, Warwick Monash Economics Student Papers.
    18. Catarina Sismeiro & Ammara Mahmood, 2018. "Competitive vs. Complementary Effects in Online Social Networks and News Consumption: A Natural Experiment," Management Science, INFORMS, vol. 64(11), pages 5014-5037, November.
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    20. Lisa M. George & Christiaan Hogendorn, 2020. "Local News Online: Aggregators, Geo‐Targeting and the Market for Local News," Journal of Industrial Economics, Wiley Blackwell, vol. 68(4), pages 780-818, December.

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    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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