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Market Definition in the Printed Media Industry: Theory and Practice

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  • Ivaldi, Marc
  • Argentesi, Elena

Abstract

This paper first discusses how the market is delineated in some recent antitrust cases in the printed media industry. It evaluates the extent to which the main features of the industry are incorporated into the analysis and affect market definition. In addition we argue that an econometric analysis that does not incorporate these features can lead to biased estimates of elasticities. As demand substitution is a crucial element for defining market, bad estimates of elasticities could blur the boundaries of relevant markets. Second we propose a simple model that encompasses these features and in particular the two-sidedness of the market. Thirdly, we review some empirical papers that analyse the issue of demand estimation in printed media. Finally, we perform a statistical estimation on a dataset of magazines in order to provide a measure of the possible bias that could arise in the estimation of elasticities when one does not use a proper model.

Suggested Citation

  • Ivaldi, Marc & Argentesi, Elena, 2005. "Market Definition in the Printed Media Industry: Theory and Practice," CEPR Discussion Papers 5096, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:5096
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    References listed on IDEAS

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    9. Ulrich Kaiser, 2004. "An Estimated Model of the German Magazine Market," CIG Working Papers SP II 2004-07, Wissenschaftszentrum Berlin (WZB), Research Unit: Competition and Innovation (CIG).
    10. Ivaldi, Marc & Lörincz, Szabolcs, 2005. "A Full Equilibrium Relevant Market Test: Application to Computer Servers," IDEI Working Papers 341, Institut d'Économie Industrielle (IDEI), Toulouse.
    11. Elena Argentesi & Lapo Filistrucchi, 2007. "Estimating market power in a two-sided market: The case of newspapers," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 22(7), pages 1247-1266.
    12. Kaiser, Ulrich, 2001. "The effects of website provision on the demand for German women's magazines," ZEW Discussion Papers 01-69, ZEW - Leibniz Centre for European Economic Research.
    13. Ivaldi, Marc & Verboven, Frank, 2005. "Quantifying the effects from horizontal mergers in European competition policy," International Journal of Industrial Organization, Elsevier, vol. 23(9-10), pages 669-691, December.
    14. Ivaldi, Marc & Verboven, Frank, 2005. "Quantifying the effects from horizontal mergers: Comments on the underlying assumptions," International Journal of Industrial Organization, Elsevier, vol. 23(9-10), pages 699-702, December.
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    Cited by:

    1. Gabriel Garber & Márcio Issao Nakane, 2015. "The Break of Brand Exclusivity in Brazilian Credit Card Acquiring: effects and markup-cost decomposition in a price dispersion setting," Working Papers Series 390, Central Bank of Brazil, Research Department.
    2. Ralf Dewenter & Ulrich Kaiser, 2006. "Horizontale Fusionen auf zweiseitigen Märkten am Beispiel von Printmedien," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 7(3), pages 335-353, August.
    3. Ramboll & The Evaluation Partnership & Europe Economics, 2015. "Economic Study on Publications on all Physical Means of Support and Electronic Publications in the context of VAT," Taxation Studies 0057, Directorate General Taxation and Customs Union, European Commission.
    4. Ivaldi, Marc & Zhang, Jiekai, 2015. "Advertising competition in the French free-to-air television broadcasting industry," TSE Working Papers 15-578, Toulouse School of Economics (TSE), revised Apr 2018.
    5. Marc Ivaldi & Jiekai Zhang, 2017. "Advertising Competition in the Free-to-Air TV Broadcasting Industry," CESifo Working Paper Series 6461, CESifo.
    6. Balmer, Roberto, 2013. "Entry and Competition in Local Newspaper Retail Markets - When two are enough," MPRA Paper 54079, University Library of Munich, Germany.
    7. Senay Sokullu, 2012. "Nonparametric Analysis of Two-Sided Markets," Bristol Economics Discussion Papers 12/628, School of Economics, University of Bristol, UK.
    8. Vincenzo Visco Comandini, 2007. "Servizi postali," Rivista di Politica Economica, SIPI Spa, vol. 97(4), pages 257-314, July-Agou.
    9. Lapo Filistrucchi, 2008. "A SSNIP test for two-sided markets: the case of media," Working Papers 08-34, NET Institute, revised Oct 2008.
    10. Javier Elizalde, 2013. "Market definition with differentiated products: a spatial competition application," European Journal of Law and Economics, Springer, vol. 36(3), pages 471-521, December.
    11. Marc Ivaldi & Catherine Muller-Vibes, 2018. "The differentiated effect of advertising on readership: evidence from a two-sided market approach," Marketing Letters, Springer, vol. 29(3), pages 363-376, September.
    12. Filistrucchi, L. & Gerardin, D. & van Damme, E.E.C. & Keunen, S. & Klein, T.J. & Michielsen, T.O. & Wileur, J., 2010. "Mergers in Two-Sided Markets - A Report to the NMa," Other publications TiSEM f901d1fe-8878-444e-a685-8, Tilburg University, School of Economics and Management.
    13. Trombetta, Federico & Rossignoli, Domenico, 2021. "The price of silence: Media competition, capture, and electoral accountability," European Journal of Political Economy, Elsevier, vol. 69(C).
    14. David S. Evans & Richard Schmalensee, 2013. "The Antitrust Analysis of Multi-Sided Platform Businesses," NBER Working Papers 18783, National Bureau of Economic Research, Inc.

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    More about this item

    Keywords

    Two-sided markets; Market definition; Printed media;
    All these keywords.

    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L40 - Industrial Organization - - Antitrust Issues and Policies - - - General
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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