Merger Simulation in a Two-Sided Market

The Case of the Dutch Daily Newspapers

L. Filistrucchi, T.J. Klein, T.O. Michielsen

Research output: Working paperOther research output

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.
Original languageEnglish
PublisherNET Institute
Number of pages43
Volume10-15
Publication statusPublished - Sep 2010

Publication series

NameNET Institute Working Paper
Volume10-15

Fingerprint

Two-sided markets
Merger simulation
Differentiated products
Mergers
Newspaper industry
Structural model
Structural econometrics
Indirect network effects
Methodology
Subscription
Profit maximization
Price-taking
Interaction

Keywords

  • Two-sided markets
  • newspapers
  • advertising
  • network effects
  • merger simulation
  • SSNIP test

Cite this

Filistrucchi, L., Klein, T. J., & Michielsen, T. O. (2010). Merger Simulation in a Two-Sided Market: The Case of the Dutch Daily Newspapers. (NET Institute Working Paper; Vol. 10-15). NET Institute.
Filistrucchi, L. ; Klein, T.J. ; Michielsen, T.O. / Merger Simulation in a Two-Sided Market : The Case of the Dutch Daily Newspapers. NET Institute, 2010. (NET Institute Working Paper).
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Filistrucchi, L, Klein, TJ & Michielsen, TO 2010 'Merger Simulation in a Two-Sided Market: The Case of the Dutch Daily Newspapers' NET Institute Working Paper, vol. 10-15, NET Institute.

Merger Simulation in a Two-Sided Market : The Case of the Dutch Daily Newspapers. / Filistrucchi, L.; Klein, T.J.; Michielsen, T.O.

NET Institute, 2010. (NET Institute Working Paper; Vol. 10-15).

Research output: Working paperOther research output

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Filistrucchi L, Klein TJ, Michielsen TO. Merger Simulation in a Two-Sided Market: The Case of the Dutch Daily Newspapers. NET Institute. 2010 Sep. (NET Institute Working Paper).