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Estimating Demand with Multi-Homing in Two-Sided Markets

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  • Pauline Affeldt
  • Elena Argentesi
  • Lapo Filistrucchi

Abstract

We empirically investigate the relevance of multi-homing in two-sided markets. First, we build a micro-founded structural econometric model that encompasses demand for differentiated products and allows for multi-homing on both sides of the market. We then use an original dataset on the Italian daily newspaper market that includes information on double-homing by readers to estimate readers’ and advertisers’ demand. The results show that an econometric model that does not allow for multihoming is likely to produce biased estimates of demand on both sides of the market. In particular, on the reader side, accounting for multi-homing helps to recognize complementarity between products; on the advertising side, it allows to measure to what extent advertising demand depends on the shares of exclusive and overlapping readers.

Suggested Citation

  • Pauline Affeldt & Elena Argentesi & Lapo Filistrucchi, 2021. "Estimating Demand with Multi-Homing in Two-Sided Markets," Discussion Papers of DIW Berlin 1965, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp1965
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    More about this item

    Keywords

    Two-sided markets; platforms; multi-homing; media; advertising;
    All these keywords.

    JEL classification:

    • C51 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Model Construction and Estimation
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising

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