Price Wars in Two-Sided Markets: The Case of the UK Quality Newspapers

S. Behringer, L. Filistrucchi

Research output: Working paperOther research output

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 profi…t maximization by four competing oligopolistic editors who recognize the existence of an indirect network effect of circulation on advertising demand. Editors choose fi…rst the political position, then simultaneously cover prices and advertising tarifs. 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.
Original languageEnglish
PublisherNET Institute
Number of pages43
Volume09-26
Publication statusPublished - Nov 2009

Publication series

NameNET Institute Working Paper
Volume09-26

Fingerprint

Price war
Two-sided markets
Newspaper industry
Indirect network effects
Differentiated products
Market structure
Profit maximization

Cite this

Behringer, S., & Filistrucchi, L. (2009). Price Wars in Two-Sided Markets: The Case of the UK Quality Newspapers. (NET Institute Working Paper; Vol. 09-26). NET Institute.
Behringer, S. ; Filistrucchi, L. / Price Wars in Two-Sided Markets : The Case of the UK Quality Newspapers. NET Institute, 2009. (NET Institute Working Paper).
@techreport{1af95ea006c644adb51a43a71776b63c,
title = "Price Wars in Two-Sided Markets: The Case of the UK Quality Newspapers",
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 profi…t maximization by four competing oligopolistic editors who recognize the existence of an indirect network effect of circulation on advertising demand. Editors choose fi…rst the political position, then simultaneously cover prices and advertising tarifs. 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.",
author = "S. Behringer and L. Filistrucchi",
year = "2009",
month = "11",
language = "English",
volume = "09-26",
series = "NET Institute Working Paper",
publisher = "NET Institute",
type = "WorkingPaper",
institution = "NET Institute",

}

Behringer, S & Filistrucchi, L 2009 'Price Wars in Two-Sided Markets: The Case of the UK Quality Newspapers' NET Institute Working Paper, vol. 09-26, NET Institute.

Price Wars in Two-Sided Markets : The Case of the UK Quality Newspapers. / Behringer, S.; Filistrucchi, L.

NET Institute, 2009. (NET Institute Working Paper; Vol. 09-26).

Research output: Working paperOther research output

TY - UNPB

T1 - Price Wars in Two-Sided Markets

T2 - The Case of the UK Quality Newspapers

AU - Behringer, S.

AU - Filistrucchi, L.

PY - 2009/11

Y1 - 2009/11

N2 - 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 profi…t maximization by four competing oligopolistic editors who recognize the existence of an indirect network effect of circulation on advertising demand. Editors choose fi…rst the political position, then simultaneously cover prices and advertising tarifs. 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.

AB - 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 profi…t maximization by four competing oligopolistic editors who recognize the existence of an indirect network effect of circulation on advertising demand. Editors choose fi…rst the political position, then simultaneously cover prices and advertising tarifs. 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.

M3 - Working paper

VL - 09-26

T3 - NET Institute Working Paper

BT - Price Wars in Two-Sided Markets

PB - NET Institute

ER -

Behringer S, Filistrucchi L. Price Wars in Two-Sided Markets: The Case of the UK Quality Newspapers. NET Institute. 2009 Nov. (NET Institute Working Paper).