Abstract
| Original language | English |
|---|---|
| Publisher | NET Institute |
| Number of pages | 46 |
| Volume | 08-34 |
| Publication status | Published - Oct 2008 |
Publication series
| Name | NET Institute Working Paper |
|---|---|
| Volume | 08-34 |
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Keywords
- Two-sided markets
- SSNIP test
- hypothetical monopolist test
- critical loss analysis
- critical elasticity analysis
- market definition
- media
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A SSNIP Test for Two-sided Markets : The Case of Media. / Filistrucchi, L.
NET Institute, 2008. (NET Institute Working Paper; Vol. 08-34).Research output: Working paper › Other research output
TY - UNPB
T1 - A SSNIP Test for Two-sided Markets
T2 - The Case of Media
AU - Filistrucchi, L.
PY - 2008/10
Y1 - 2008/10
N2 - I discuss the design and implementation of a SSNIP test in order to identify the relevant market in a media market. I argue that in such a two-sided market the traditional SSNIP test cannot be applied as it is usually conceived but rather should be modified in order to take into account indirect network externalities. I discuss the issues of which price the hypothetical monopolist should be thought of as raising, of whether we should look at profits changes on only one side or on both sides of the market and of which feedback among the two sides of the market we should take into account. I then derive the relevant formulas for Critical Loss Analysis. These look much uglier than in a single-sided market but in fact they are easy to calculate as they are still expressed in terms of elasticities and of current observed markups, prices and quantities. Data requirements are however higher as one needs to estimate the matrixes of the own and cross price elasticities of demand on the two-sides of the market and the matrixes of the network effects.
AB - I discuss the design and implementation of a SSNIP test in order to identify the relevant market in a media market. I argue that in such a two-sided market the traditional SSNIP test cannot be applied as it is usually conceived but rather should be modified in order to take into account indirect network externalities. I discuss the issues of which price the hypothetical monopolist should be thought of as raising, of whether we should look at profits changes on only one side or on both sides of the market and of which feedback among the two sides of the market we should take into account. I then derive the relevant formulas for Critical Loss Analysis. These look much uglier than in a single-sided market but in fact they are easy to calculate as they are still expressed in terms of elasticities and of current observed markups, prices and quantities. Data requirements are however higher as one needs to estimate the matrixes of the own and cross price elasticities of demand on the two-sides of the market and the matrixes of the network effects.
KW - Two-sided markets
KW - SSNIP test
KW - hypothetical monopolist test
KW - critical loss analysis
KW - critical elasticity analysis
KW - market definition
KW - media
M3 - Working paper
VL - 08-34
T3 - NET Institute Working Paper
BT - A SSNIP Test for Two-sided Markets
PB - NET Institute
ER -