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News Aggregators and Competition Among Newspapers on 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 on the Internet," TSE Working Papers 13-388, Toulouse School of Economics (TSE), revised 16 Jul 2014.
  • Handle: RePEc:tse:wpaper:27052
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    References listed on IDEAS

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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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    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. Matthew Ellman & Tomás Rodríguez Barraquer, 2016. "Strategic grouping and search for quality journalism, online versus offline," Working Papers 16-21, NET Institute.
    4. 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.
    5. Alaoui, Larbi & Germano, Fabrizio, 2020. "Time scarcity and the market for news," Journal of Economic Behavior & Organization, Elsevier, vol. 174(C), pages 173-195.
    6. 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.
    7. 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.
    8. Peitz, Martin & Reisinger, Markus, 2014. "The Economics of Internet Media," Working Papers 14-23, University of Mannheim, Department of Economics.
    9. 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.

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    More about this item

    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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