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News Aggregators and Competition Among Newspapers in the Internet


  • Doh-Shin Jeon

    () (Toulouse School of Economics)

  • Nikrooz Nasr Esfahani

    () (Toulouse School of Economics)


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

    1. Anderson, Simon P. & Foros, Øystein & Kind, Hans Jarle & Peitz, Martin, 2012. "Media market concentration, advertising levels, and ad prices," International Journal of Industrial Organization, Elsevier, vol. 30(3), pages 321-325.
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    3. Jean-Charles Rochet & Jean Tirole, 2014. "Platform Competition in Two-Sided Markets," CPI Journal, Competition Policy International, vol. 10.
    4. Doh‐Shin Jeon & Domenico Menicucci, 2011. "Interconnection among academic journal websites: multilateral versus bilateral interconnection," RAND Journal of Economics, RAND Corporation, vol. 42(2), pages 363-386, June.
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    7. Doh-Shin Jeon & Jean-Charles Rochet, 2010. "The Pricing of Academic Journals: A Two-Sided Market Perspective," American Economic Journal: Microeconomics, American Economic Association, vol. 2(2), pages 222-255, May.
    8. Caillaud, Bernard & Jullien, Bruno, 2001. "Competing cybermediaries," European Economic Review, Elsevier, vol. 45(4-6), pages 797-808, May.
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    10. Jean-Charles Rochet & Jean Tirole, 2002. "Cooperation Among Competitors: Some Economics Of Payment Card Associations," RAND Journal of Economics, The RAND Corporation, vol. 33(4), pages 549-570, Winter.
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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. Matthew Ellman & Tomás Rodríguez Barraquer, 2016. "Strategic grouping and search for quality journalism, online versus offline," Working Papers 16-21, NET Institute.
    3. Lesley Chiou & Catherine Tucker, 2015. "Content Aggregation by Platforms: The Case of the News Media," NBER Working Papers 21404, National Bureau of Economic Research, Inc.

    More about this item


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

    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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