Merger Simulation in a Two-Sided Market: The Case of the Dutch Daily Newspapers

43 Pages Posted: 20 Oct 2010  

Lapo Filistrucchi

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

Tobias J. Klein

Tilburg University - Department of Econometrics & Operations Research; Tilburg University - Center for Economic Research (CentER); IZA Institute of Labor Economics; Netspar; Tilburg Law and Economics Center (TILEC)

Thomas Michielsen

Tilburg University - Center and Faculty of Economics and Business Administration; Tilburg Sustainability Center

Date Written: September 30, 2010

Abstract

We develop a structural econometric framework that allows us to simulate the effects of mergers among two-sided platforms selling differentiated products. We apply the proposed methodology to the Dutch newspaper industry. Our structural model encompasses demands for differentiated products on both sides of the market and profit maximization by competing oligopolistic publishers who choose subscription and advertising prices, while taking the interactions between the two-sides of the market into account. We measure the sign and size of the indirect network effects between the two sides of the market and simulate the effects of a hypothetical merger on prices and welfare.

Keywords: Two-Sided Markets, Newspapers, Advertising, Network Effects, Merger Simulation, SSNIP Test

JEL Classification: L13, L40, L82

Suggested Citation

Filistrucchi, Lapo and Klein, Tobias J. and Michielsen, Thomas, Merger Simulation in a Two-Sided Market: The Case of the Dutch Daily Newspapers (September 30, 2010). NET Institute Working Paper No. 10-15. Available at SSRN: https://ssrn.com/abstract=1694313 or http://dx.doi.org/10.2139/ssrn.1694313

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

Tobias J. Klein

Tilburg University - Department of Econometrics & Operations Research ( email )

Tilburg, 5000 LE
Netherlands

HOME PAGE: http://center.uvt.nl/staff/klein/index.html

Tilburg University - Center for Economic Research (CentER)

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Netspar

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Tilburg Law and Economics Center (TILEC)

Warandelaan 2
Tilburg, 5000 LE
Netherlands

Thomas Michielsen

Tilburg University - Center and Faculty of Economics and Business Administration ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Tilburg Sustainability Center ( email )

P.O. Box 90153
Tilburg, North Brabant 5000 LE
Netherlands

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