IDEAS home Printed from
   My bibliography  Save this paper

Network effects in the press and advertising industries


  • LAUSSEL, Didier
  • SONNAC, Nathalie


Generally, economists interested in network effects analyse these effects when the consumption externality created by the demand for the good is produced inside the industry itself. But it can be conceived that network effects take place from one industry to another. This happens when the utility of a good produced in a given industry varies with the size of the demand for a product produced in another industry. A particularly significant example of this phenomenon is provided by the interaction between the media and advertising industries. To illustrate the consequences of these network effects, we consider an editor who is a monopolist both in the press and advertising markets. In both markets, he faces a continuum of customers. In the press industry, these customers (readers) vary according to their willingness to pay for the newspaper, but also with their attitudes toward advertising: some of them are advertising-lovers while the others are advertising-averse. On the advertising market, advertisers vary according to their willingness to pay for an ad in the newspaper, which also depends positively on its leadership's size. We characterise the monopoly solution in terms of the monopolist's instruments: the price of the newspaper and the advertising rate.

Suggested Citation

  • GABSZEWICZ, Jean & LAUSSEL, Didier & SONNAC, Nathalie, 2002. "Network effects in the press and advertising industries," CORE Discussion Papers 2002062, Universit√© catholique de Louvain, Center for Operations Research and Econometrics (CORE).
  • Handle: RePEc:cor:louvco:2002062

    Download full text from publisher

    File URL:
    Download Restriction: no

    Other versions of this item:


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

    Cited by:

    1. Cortade, Thomas, 2006. "A Strategic Guide on Two-Sided Markets Applied to the ISP Market," MPRA Paper 2602, University Library of Munich, Germany.

    More about this item


    Access and download statistics


    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:cor:louvco:2002062. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Alain GILLIS). General contact details of provider: .

    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.

    We have no references for this item. You can help adding them by using 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.