Preliminary Empirical Assessment of Offshore Production Platforms ...
Multisided Platforms and Market Power Some empirical evidence
23
Multisided Platforms and Market Power Some empirical evidence Marc Ivaldi 2nd Lear Conference on the Economics of Competition Law Rome, June 7-8, 2007
description
2nd Lear Conference on the Economics of Competition Law Rome, June 7-8, 2007. Multisided Platforms and Market Power Some empirical evidence. Marc Ivaldi. Content. Printed media industries Market delineation Standard approach Model-based approach. - PowerPoint PPT Presentation
Transcript of Multisided Platforms and Market Power Some empirical evidence
Multisided Platforms and Market PowerSome empirical evidence
Marc Ivaldi
2nd Lear Conference on the Economics of Competition LawRome, June 7-8, 2007
2
Content
Printed media industries Market delineation
Standard approach Model-based approach
3
Market definition in printed media industries
Distinctive features Differentiated products
Content (general vs specialized information) Quality (tabloids vs art magazines) Frequency Scope
Local vs national
Bidimensional products Readership Advertising
Substitutes Other medias
4
Market definition in printed media industries
Examples Differentiated products
Recoletos / Unedisa case Dialy and non dialy publications General information, sport and financial papers Tabloids and quality press
Gruner+Jahr / Financial Times / JV Ballarino / Grandi quotidiani
Local and national publication (separate markets) Conclusion
Demand side perspective Printed media markets segmented in tiny sub-markets
5
Market definition in printed media industries
Examples Substitutability
Recoletos / Unedisa case Newsquest Ltd / Independent News Conclusion : Not taken into account
Written press distinct from other media products Why? Not the same depth and range of information
However supply side arguments
6
Market definition in printed media industries
Examples Advertising
Newspaper publishing decision Class Editori / Sole 24 Ore case Recoletos / Unedisa Conclusion
Different types of advertising define different types of readers and vice-versa
Readership and advertising are separate markets
7
Market definition in printed media industries
Methods Usually qualitative Now quantitative
Archant Limited / Independent News and Media Limited Commission claims to have performed a SSNIP test Commission concludes that the relevant market is th
local one
8
An econometric illustration
Merger SOCPRESSE / Groupe Express-Expansion French weekly magazines of general
information Decision : the merger has been authorized
9
An econometric illustration
Econometric analysis by the competition authority Individual demand are price inelastic Aggregate demand is elastic Conclusion
Cross-price elasticities are small The market is larger??
10
An econometric illustration
0%10%20%30%40%50%60%70%80%90%
100%
Share of Unit Purchases in Total Sales
(Average – 1996-2001)
11
Subscription
Unit purchase Outside good
… …
Titles Titles
An econometric illustration
12
An econometric illustration
Alternative model Accounts for differentiation
0ln( ) ln( ) ln( )xj j j j j ms s p s
Relative
market shares
Quality-Price
tradeoff
Differentiation
effect
13
An econometric illustration
Alternative model Accounts for differentiation
Accounts for endogeneity First set of instruments : All exogenous variables +
previous’ year circulation Second set of instruments : All exogenous variables +
advertising revenue and its lagged value
0ln( ) ln( ) ln( )xj j j j j ms s p s
14
Estimation without
advertising as an instrument
Estimation withadvertising as an
instrument
Le Figaro Magazine -0.36(0.001)
-1.22(0.003)
Le Nouvel Observateur -0.31(0.000)
-1.06(0.001)
Le Point -0.28(0.000)
-0.95(0.001)
L’Express -0.28(0.001)
-0.95(0.002)
Paris Match -0.20(0.002)
-0.67(0.005)
Valeurs Actuelles -0.36(0.044)
-1.22(0.148)
15
Estimation withoutadvertising as an
instrument
Estimation withadvertising as an
instrument
La Vie 0.000(0.000)
0.001(0.000)
Le Figaro Magazine 0.041(0.001)
0.137(0.003)
Le Nouvel Observateur 0.008(0.000)
0.025(0.001)
Le Point 0.006(0.000)
0.020(0.001)
L’Express 0.008(0.001)
0.027(0.002)
Paris Match 0.026(0.002)
0.087(0.005)
Valeurs Actuelles 0.001(0.000)
0.002(0.001)
VSD 0.009(0.001)
0.031(0.002)
16
Econometric illustration ….
…. of neglecting feedback effects between the two sides of the market
This can translate in bad estimates of market power …
17
Example: The market for academic journals
Academic journals = intermediary role Research output dissemination Cerification
Academic journal = Two-sided structure
18
Structure
AUTHORSAUTHORS
PUBLISHERSPUBLISHERS
LIBRARIESLIBRARIES
READERSREADERS
0 €
K €
0 €
ARCHIVEARCHIVE
19
Academic journals
A model
Main result: not recognizing the endogeneity of the impact factor yields zero correlation between the impact factor and the demand for journals !!
0ln ln lnj j j j jg js s X I p s
Impact factor
1jt jt j jtI I Z u
20
Acadamic journals: main result
Own Elasticity Cross Elasticity Marginal Cost Mark Up (%)
Mean Median Mean Median Mean Median Mean Median
Model 1 -29.02 -18.28 0.526 0.108 1058.64 645.10 9.80 6.92
Model 2 -52.27 -32.94 0.987 0.203 1081.26 668.69 5.56 3.85
21
More general models
Argentesi – Filistrucchi (2006) Kaiser – Wright (2006) Rysman (2004)
0, , ;it it it ity f adv x y
0, , ;it it it itadv h p y y
22
More general models
Argentesi – Filistrucchi (2006) Collusion on readership / Competition on
advertisng
23
Concluding remarks
Market delineation under structural econometric provides a very differnt view of relevant markets
Needs more work « Real » interaction effects Dynamics Sensitivity analysis
Mark Rysman
