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  4. November 2016
  5. News Aggregators and Competition among Newspapers on the Internet

American Economic Journal:
Microeconomics

ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)

News Aggregators and Competition among Newspapers on the Internet

  • Doh-Shin Jeon
  • Nikrooz Nasr
American Economic Journal: Microeconomics
vol. 8, no. 4, November 2016
(pp. 91–114)
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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.

Citation

Jeon, Doh-Shin, and Nikrooz Nasr. 2016. "News Aggregators and Competition among Newspapers on the Internet." American Economic Journal: Microeconomics, 8 (4): 91–114. DOI: 10.1257/mic.20140151

Additional Materials

JEL Classification

  • D21 Firm Behavior: Theory
  • D22 Firm Behavior: Empirical Analysis
  • L13 Oligopoly and Other Imperfect Markets
  • L82 Entertainment; Media
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