We study whether advertising subsidizes consumers newspapers' prices. Using a model representing the two-sided network effects between the advertising and printed media industries, we show that the answer should be nuanced according to the readership's attitude toward advertising.
Université de la MéditerranéeGroupement de Recherche en Économie Quantitative d'Aix-Marseille
National Institute of Statistics and Economic Studies Government of FranceResearch Center for Economics and Statistics
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Jaskold Gabszewicz, J., Laussel, D., & Sonnac, N. (2005). Does advertising lower the price of newspapers to consumers? A theoretical appraisal. Economics Letters, 87(1), 127-134. https://doi.org/10.1016/j.econlet.2004.06.024 (Original work published 2005)