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http://hdl.handle.net/2451/29520
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| Title: | Price Wars in Two-Sided Markets: The case of the UK Quality Newspapers |
| Authors: | Behringer, Stefan - Universitat Mainz
Filistrucchi, Lapo - Tilburg University and University of Florence |
| Issue Date: | 2009 |
| Series/Report no.: | Net Institute Working Paper;09-26 |
| Abstract: | This paper investigates the price war in the UK quality newspaper
industry in the 1990s. We build a model of the newspaper market which
encompasses demand for differentiated products on both, the readers and
advertisers side of the market, and profit maximization by four
competing oligopolistic editors who recognize the existence of an
indirect network effect of circulation on advertising demand. Editors
choose first the political position, then simultaneously cover prices
and advertising tariffs. We contribute to the literature on two-sided
markets by endogenizing the political differentiation of newspapers in a
model with more than two firms. We simulate changes to market structure
in order to explore which of the candidate explanations is most likely
to lie behind the observed price war. |
| URI: | http://hdl.handle.net/2451/29520 |
| Appears in Collections: | NET Institute Working Papers Series
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