News Aggregators and Competition among Newspapers on the Internet
- (pp. 91-114)
AbstractThis 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.
Citation2016. "News Aggregators and Competition among Newspapers on the Internet." American Economic Journal: Microeconomics, 8(4): 91-114. DOI: 10.1257/mic.20140151
- D21 Firm Behavior: Theory
- D22 Firm Behavior: Empirical Analysis
- L13 Oligopoly and Other Imperfect Markets
- L82 Entertainment; Media