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Mergers in Two‐Sided Markets: An Application to the Canadian Newspaper Industry

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  • Ambarish Chandra
  • Allan Collard‐Wexler

Abstract

In this paper, we study mergers in two‐sided industries and, in particular, the effects of mergers in the newspaper industry. We present a model which shows that mergers in two‐sided markets may not necessarily lead to higher prices for either side of the market. We test our conclusions by examining a spate of mergers in the Canadian newspaper industry in the late 1990s. Specifically, we analyze prices for both circulation and advertising to try to understand the impact that these mergers had on consumer welfare. We find that greater concentration did not lead to higher prices for either newspaper subscribers or advertisers.

Suggested Citation

  • Ambarish Chandra & Allan Collard‐Wexler, 2009. "Mergers in Two‐Sided Markets: An Application to the Canadian Newspaper Industry," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 18(4), pages 1045-1070, December.
    • Handle: RePEc:bla:jemstr:v:18:y:2009:i:4:p:1045-1070
    DOI: 10.1111/j.1530-9134.2009.00237.x
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    More about this item

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L4 - Industrial Organization - - Antitrust Issues and Policies

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