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Advertising and the Rise of Free Daily Newspapers

Author

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  • JEAN J. GABSZEWICZ
  • DIDIER LAUSSEL
  • NATHALIE SONNAC

Abstract

We analyze the competition between two newspapers in a vertical differentiation model where the qualities of the journals are determined endogenously in the first stage of the game. We show that when the advertising revenues per reader increase there is a critical value above which the quality of the low quality newspaper discontinuously falls while it becomes similtaneously a free newspaper. This is beneficial to the high quality journal and detrimental to the readers.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Jean J. Gabszewicz & Didier Laussel & Nathalie Sonnac, 2012. "Advertising and the Rise of Free Daily Newspapers," Economica, London School of Economics and Political Science, vol. 79(313), pages 137-151, January.
    • Handle: RePEc:bla:econom:v:79:y:2012:i:313:p:137-151
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    File URL: http://hdl.handle.net/10.1111/
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    Cited by:

    1. Simon P. Anderson & Bruno Jullien, 2015. "The advertising-financed business model in two-sided media markets," Post-Print hal-02866192, HAL.
    2. João Correia-da-Silva & Joana Resende, 2013. "Free daily newspapers: too strong incentives to print?," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 12(2), pages 113-130, August.

    More about this item

    JEL classification:

    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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