Estimating Market Power in a Two-Sided Market: The Case of Newspapers

EUI ECO Working Paper Series 07-2005

32 Pages Posted: 16 Apr 2018

See all articles by Elena Argentesi

Elena Argentesi

University of Bologna - Department of Economics

Lapo Filistrucchi

Tilburg University, TILEC; University of Florence, Dipartimento di Scienze Economiche

Date Written: May 1, 2005

Abstract

The newspaper industry is a two-sided market: the readers market and the advertising market are closely linked by inter-market network externalities. We estimate market power in the Italian newspaper industry by building a structural model which encompasses a demand estimation for differentiated products on both sides of the market and where profit maximization by the publishing firms takes into account the interactions between them. The question that we address is whether the observed price pattern is consistent with profit-maximizing behavior by competing firms or is instead driven by some form of (tacit or explicit) coordinated practice.

Keywords: demand estimation, market power, two-sided markets, newspapers, differentiated products

JEL Classification: L11, L40, L82, C33

Suggested Citation

Argentesi, Elena and Filistrucchi, Lapo and Filistrucchi, Lapo, Estimating Market Power in a Two-Sided Market: The Case of Newspapers (May 1, 2005). EUI ECO Working Paper Series 07-2005, Available at SSRN: https://ssrn.com/abstract=1290308 or http://dx.doi.org/10.2139/ssrn.1290308

Elena Argentesi

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, BO 40141
Italy
+39 051 209 2664 (Phone)
+39 051 209 8040 (Fax)

HOME PAGE: http://https://www.unibo.it/sitoweb/elena.argentesi/en

Lapo Filistrucchi (Contact Author)

Tilburg University, TILEC ( email )

P.O. Box 90153
Tilburg, Noord-Brabant NL-5000 LE
Netherlands
+31 13 466 3360 (Phone)
+31 13 466 3042 (Fax)

HOME PAGE: http://www.lapofilistrucchi.com

University of Florence, Dipartimento di Scienze Economiche ( email )

via delle Pandette 9
Florence, Florence IT-50127
Italy
+39 055 2759579 (Phone)
+39 055 2759910 (Fax)

HOME PAGE: http://www.lapofilistrucchi.com

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