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News Aggregators and Competition Among Newspapers in the Internet

Author

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  • Doh-Shin Jeon

    (Toulouse School of Economics)

  • Nikrooz Nasr Esfahani

    (Toulouse School of Economics)

Abstract

In this paper, we study how the presence of a news aggregator affects competition among (horizontally differentiated) newspapers in the Internet. For this purpose, we build a model of multiple issues which allows each newspaper to choose quality on each issue. Our model provides a micro foundation for the service offered by the aggregator and captures both the "business-stealing effect" and the "readership-expansion effect" of the aggregator. We find that the presence of the aggregator leads each newspaper to specialize in terms of news coverage. In this case, its presence changes quality choices from strategic substitutes to strategic complements. In the case of symmetric newspapers, this leads to an increase in the quality of newspapers and an increase in consumer surplus, with an ambiguous effect on newspapers’ profits. In the case of asymmetric newspapers, quality can increase or decrease depending on the sensitivity of advertising revenue to quality.

Suggested Citation

  • Doh-Shin Jeon & Nikrooz Nasr Esfahani, 2012. "News Aggregators and Competition Among Newspapers in the Internet," Working Papers 12-20, NET Institute.
  • Handle: RePEc:net:wpaper:1220
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    References listed on IDEAS

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. All hail news aggregators!
      by Economic Logician in Economic Logic on 2013-05-09 19:17:00

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    Cited by:

    1. Joan Calzada & Guillem Ordóñez, 2012. "Competition in the news industry: fighting aggregators with versions and links," Working Papers 12-22, NET Institute.
    2. 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).
    3. 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.
    4. Matthew Ellman & Tomás Rodríguez Barraquer, 2016. "Strategic grouping and search for quality journalism, online versus offline," Working Papers 16-21, NET Institute.
    5. 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.
    6. Jeon, Doh-Shin, 2018. "Economics of News Aggregators," TSE Working Papers 18-912, Toulouse School of Economics (TSE).
    7. 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.
    8. Alaoui, Larbi & Germano, Fabrizio, 2020. "Time scarcity and the market for news," Journal of Economic Behavior & Organization, Elsevier, vol. 174(C), pages 173-195.
    9. repec:hal:spmain:info:hdl:2441/478a1feno18otpdr60lclo4fuq is not listed on IDEAS
    10. 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.
    11. 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.
    12. Peitz, Martin & Reisinger, Markus, 2014. "The Economics of Internet Media," Working Papers 14-23, University of Mannheim, Department of Economics.
    13. 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).
    14. 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.
    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. Charles Angelucci & Julia Cagé & Michael Sinkinson, 2022. "Media Competition and News Diets," SciencePo Working papers Main hal-03880088, HAL.
    17. repec:hal:spmain:info:hdl:2441/7jk88md0ar9hga662p2vjjq4kc is not listed on IDEAS
    18. Charles Angelucci & Julia Cagé & Michael Sinkinson, 2022. "Media Competition and News Diets," Post-Print hal-03880088, HAL.
    19. Tim Meyer & Anna Kerkhof & Carmelo Cennamo & Tobias Kretschmer, 2022. "Competing for Attention on Information Platforms: The Case of News," CESifo Working Paper Series 9832, CESifo.
    20. 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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    More about this item

    Keywords

    Newspapers; News Aggregator; Internet; Quality; Strategic Substitutes; Strategic Complements; Advertising; Business-stealing; Readership-expansion; Opting Out.;
    All these keywords.

    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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