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Prices and Network Eects in Two-Sided Markets: the Belgian Newspaper Industry

Author

Listed:
  • Van Cayseele, Patrick

    (Katholieke Universiteit Leuven, Belgium
    Universiteit Amsterdam, The Netherlands)

  • Vanormelingen, Stijn

    () (Hogeschool-Universiteit Brussel (HUB), Belgium
    Katholieke Universiteit Leuven, Belgium)

Abstract

This paper investigates the two-sided nature of the newspaper industry. We explicitly take into account cross network eects that exist between advertisers and newspaper readers. On one side, advertisers.demand for publicity space depends on the number of newspaper readers and their characteristics. On the other side, readers. Demand can be, positively or negatively, in.uenced by the number of advertisements. In addition, editors may own several newspapers and hence a variety of cross-market eects that result from changes in market prices exist. To estimate demand parameters for both sides of the market, a speci.c structural model is needed that takes into account those eects. We estimate network eects and price elasticities for Belgian newspaper publishers to assess market power and the degree of competition in the market, which experienced a large consolidation wave over the last decades. This allows us to evaluate a recent merger in the Belgian newspaper industry.

Suggested Citation

  • 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.
  • Handle: RePEc:hub:wpecon:200906
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. David Flath, 2012. "Nonlinear Pricing of Japanese Newspapers," ISER Discussion Paper 0851, Institute of Social and Economic Research, Osaka University.
    2. David Flath, 2010. "Resale Price Maintenance by Japanese Newspapers," ISER Discussion Paper 0787, Institute of Social and Economic Research, Osaka University.
    3. David Flath, 2012. "Japanese Newspapers," ISER Discussion Paper 0850, Institute of Social and Economic Research, Osaka University.

    More about this item

    Keywords

    two-sided markets; newspapers; demand estimation;

    JEL classification:

    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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