Mergers in Two-Sided Markets: An Application to the Canadian Newspaper Industry

26 Pages Posted: 26 Oct 2009

See all articles by Ambarish Chandra

Ambarish Chandra

University of Toronto - Rotman School of Management

Allan Collard-Wexler

Duke University

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Abstract

In this paper, we study mergers in two-sided industries and, in particular, the effects of mergers in the newspaper industry. We present a model which shows that mergers in two-sided markets may not necessarily lead to higher prices for either side of the market. We test our conclusions by examining a spate of mergers in the Canadian newspaper industry in the late 1990s. Specifically, we analyze prices for both circulation and advertising to try to understand the impact that these mergers had on consumer welfare. We find that greater concentration did not lead to higher prices for either newspaper subscribers or advertisers.

Suggested Citation

Chandra, Ambarish and Collard-Wexler, Allan, Mergers in Two-Sided Markets: An Application to the Canadian Newspaper Industry. Journal of Economics & Management Strategy, Vol. 18, Issue 4, pp. 1045-1070, Winter 2009. Available at SSRN: https://ssrn.com/abstract=1492377 or http://dx.doi.org/10.1111/j.1530-9134.2009.00237.x

Ambarish Chandra

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Allan Collard-Wexler

Duke University ( email )

100 Fuqua Drive
Durham, NC 27708-0204
United States

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