In Japan, newspapers enjoy a special exemption from antimonopoly prohibitions against resale price maintenance (suppliers' stipulations that bar downstream firms from price discounting), but are each required to set uniform prices throughout Japan. In fact, the newspapers have rarely changed their subscription prices in recent years, and the three leading national dailies, together accounting for about half the total industry circulation, and thirteen other papers accounting for another one eighth of industry circulation, all have set exactly the same price (3,925 yen per month for combined morning-and-evening editions, and 3,007 yen per month for morning-only). The remaining local papers all set lower prices. The authorized resale price maintenance, and prohibition against prices that vary geographically, arguably have allowed collusive price increases, but by precisely how much it is difficult to judge. I here estimate that if the coordinated pricing of the leading national and local newspapers is inflating their prices by 340 yen per month (about a 10 percent increase in their prices), it entails economic waste of 86-billion yen ($1-billion) per year but is adding only around 5-billion yen per year to newspaper industry profit. The estimate is based on an econometric model of newspaper demand, estimated for 47 Japanese newspapers using March 2007 micro-data. The paper also estimates the demand and supply of newspaper advertising and a newspaper subscription price equation using 2007 cross-section data. The subscription pricing equation reflects the interdependence of demand between morning-only subscriptions and morning-and-evening subscriptions offered by the same newspaper.
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- Ambarish Chandra & Allan Collard-Wexler, 2009.
"Mergers in Two-Sided Markets: An Application to the Canadian Newspaper Industry,"
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- Lapo Filistrucchi & Tobias J. Klein & Thomas Michielsen, 2011. "Assessing Unilateral Merger Effects in a Two-Sided Market: An Application to the Dutch Daily Newspaper Market," Working Papers - Economics wp2011_15.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
- Filistrucchi, L. & Klein, T.J. & Michielsen, T.O., 2011. "Assessing Unilateral Merger Effects in a Two-Sided Market : An Application to the Dutch Daily Newspaper Market," Discussion Paper 2011-114, Tilburg University, Center for Economic Research.
- 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.
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- Flath, David, 1989. "Vertical restraints in Japan," Japan and the World Economy, Elsevier, vol. 1(2), pages 187-203, March.
- Van Cayseele, Patrick & Vanormelingen, Stijn, 2009. "Prices and Network Eects in Two-Sided Markets: the Belgian Newspaper Industry," Working Papers 2009/06, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
- repec:rje:randje:v:37:y:2006:3:p:668-691 is not listed on IDEAS
- Bruno Jullien & Patrick Rey, 2007. "Resale price maintenance and collusion," RAND Journal of Economics, RAND Corporation, vol. 38(4), pages 983-1001, December.
- Jullien, Bruno & Rey, Patrick, 2000. "Resale Price Maintenance and Collusion," IDEI Working Papers 102, Institut d'Économie Industrielle (IDEI), Toulouse.
- Jullien, Bruno & Rey, Patrick, 2000. "Resale Price Maintenance and Collusion," CEPR Discussion Papers 2553, C.E.P.R. Discussion Papers.
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