News Aggregators and Competition Among Newspapers on the Internet

Esfahani, Nikrooz Nasr and Jeon, Doh-Shin (2016) News Aggregators and Competition Among Newspapers on the Internet. American Economic Journal: Microeconomics, 8 (4). pp. 91-114.

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Official URL: http://tse-fr.eu/pub/29920

Abstract

This paper studies how news aggregators affect the quality choices of newspapers competing on the Internet. To provide a micro-foundation for the role of the aggregator, we build a model of multiple issues where newspapers choose their quality on each issue. Our model captures well the main trade-off between the "business-stealing" effect and the "readership-expansion" effect. We find that the aggregator increases the quality only if the readership-expansion effect is large enough relative to the business-stealing effect. Using a condition obtained from empirical results, we find that the aggregator increases the quality and social welfare, but affects newspapers' profits ambiguously.

Item Type: Article
Language: English
Date: October 2016
Refereed: Yes
JEL codes: D21 - Firm Behavior
D43 - Oligopoly and Other Forms of Market Imperfection
L13 - Oligopoly and Other Imperfect Markets
L82 - Entertainment; Media (Performing Arts, Visual Arts, Broadcasting, Publishing, etc.)
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 18 Apr 2016 14:48
Last Modified: 26 Mar 2018 08:47
OAI ID: oai:tse-fr.eu:29920
URI: http://publications.ut-capitole.fr/id/eprint/18733

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