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News Aggregators and Competition Among Newspapers in the Internet

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  • Esfahani, Nikrooz Nasr
  • Jeon, Doh-Shin

Abstract

We study how the presence of a news aggregator affects quality choices of newspapers competing on the Internet. To provide a microfoundation for the role of the aggregator, we build a model of multiple issues where each newspaper chooses quality on each issue. This model captures the "business-stealing effect" and the "readership expansion effect" of the aggregator. We find that the presence of the aggregator leads newspapers to specialize in news coverage, changes quality choices from strategic substitutes to strategic complements and is likely to increase the quality of newspapers and social welfare, with an ambiguous effect on newspapers’ profits.

Suggested Citation

  • Esfahani, Nikrooz Nasr & Jeon, Doh-Shin, 2013. "News Aggregators and Competition Among Newspapers in the Internet," IDEI Working Papers 770, Institut d'Économie Industrielle (IDEI), Toulouse, revised 16 Jul 2014.
  • Handle: RePEc:ide:wpaper:27049
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    1. All hail news aggregators!
      by Economic Logician in Economic Logic on 2013-05-09 19:17:00

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    3. Peitz, Martin & Reisinger, Markus, 2014. "The Economics of Internet Media," Working Papers 14-23, University of Mannheim, Department of Economics.
    4. Joan Calzada & Guillem Ordóñez, 2012. "Competition in the news industry: fighting aggregators with versions and links," Working Papers 12-22, NET Institute.
    5. Cagé, Julia, 2020. "Media competition, information provision and political participation: Evidence from French local newspapers and elections, 1944–2014," Journal of Public Economics, Elsevier, vol. 185(C).
    6. Du, Kai & Song, Jinyuan, 2022. "The impact of geotargeting on household information acquisition: Evidence from a Google News redesign," Research Policy, Elsevier, vol. 51(10).
    7. Lisa M. George & Christiaan Hogendorn, 2020. "Local News Online: Aggregators, Geo‐Targeting and the Market for Local News," Journal of Industrial Economics, Wiley Blackwell, vol. 68(4), pages 780-818, December.
    8. Matthew Ellman & Tomás Rodríguez Barraquer, 2016. "Strategic grouping and search for quality journalism, online versus offline," Working Papers 16-21, NET Institute.
    9. Lesley Chiou & Catherine Tucker, 2017. "Content aggregation by platforms: The case of the news media," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 26(4), pages 782-805, December.
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    11. Martin Peitz, 2024. "Digital Attention Intermediaries," CRC TR 224 Discussion Paper Series crctr224_2024_520, University of Bonn and University of Mannheim, Germany.
    12. Jeon, Doh-Shin, 2018. "Economics of News Aggregators," TSE Working Papers 18-912, Toulouse School of Economics (TSE).
    13. Joan Calzada & Ricard Gil, 2020. "What Do News Aggregators Do? Evidence from Google News in Spain and Germany," Marketing Science, INFORMS, vol. 39(1), pages 134-167, January.
    14. Julia Cage, 2017. "Media Competition, Information Provision and Political Participation: Evidence from French Local Newspapers and Elections, 1944-2014," SciencePo Working papers hal-03393164, HAL.
    15. Julia Cage, 2017. "Media Competition, Information Provision and Political Participation: Evidence from French Local Newspapers and Elections, 1944-2014," SciencePo Working papers Main hal-03393164, HAL.
    16. Tin Cheuk Leung & Koleman Strumpf, 2024. "Disentangling Demand and Supply of Media Bias: The Case of Newspaper Homepages," CESifo Working Paper Series 10890, CESifo.
    17. repec:hal:spmain:info:hdl:2441/478a1feno18otpdr60lclo4fuq is not listed on IDEAS
    18. Catarina Sismeiro & Ammara Mahmood, 2018. "Competitive vs. Complementary Effects in Online Social Networks and News Consumption: A Natural Experiment," Management Science, INFORMS, vol. 64(11), pages 5014-5037, November.
    19. Mahmood, Ammara & Sismeiro, Catarina, 2017. "Will They Come and Will They Stay? Online Social Networks and News Consumption on External Websites," Journal of Interactive Marketing, Elsevier, vol. 37(C), pages 117-132.
    20. repec:hal:spmain:info:hdl:2441/7jk88md0ar9hga662p2vjjq4kc is not listed on IDEAS
    21. Alexandre de Cornière & Miklos Sarvary, 2023. "Social Media and News: Content Bundling and News Quality," Management Science, INFORMS, vol. 69(1), pages 162-178, January.
    22. Cagé, Julia, 2017. "Media Competition, Information Provision and Political Participation: Evidence from French Local Newspapers and Elections, 1944," CEPR Discussion Papers 12198, C.E.P.R. Discussion Papers.
    23. Bisceglia, Michele, 2023. "The unbundling of journalism," European Economic Review, Elsevier, vol. 158(C).
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    25. Go, Geoffrey, 2021. "News Media, Digital Platforms and Content Sharing," Warwick-Monash Economics Student Papers 23, Warwick Monash Economics Student Papers.

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    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media

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