Editor:
Universidad Carlos III de Madrid. Departamento de Economía de la Empresa
Issued date:
2013-07
Sponsor:
Research funded by two research projects, S-0505/TIC-0230 by the Comunidad de Madrid and
ECO20011-30198 by MICINN agency of Spanish Government
Serie/No.:
UC3M Working papers. Business Economics 13-02
Keywords:
Newspapers
,
Differentiated products
,
Dynamic equilibrium
,
Generalized method of moments
,
Advertising expenditure
,
Time series
,
Persistence
,
Cointegration
,
Structural changes
Rights:
Atribución-NoComercial-SinDerivadas 3.0 España
Abstract:
In this work, we develop a new model for competition in markets with differentiated products. In
addition, we present a consumer model designed to produce a flexible nonlinear inverse demand
system that resembles the classical Multinomial Logit model, and diIn this work, we develop a new model for competition in markets with differentiated products. In
addition, we present a consumer model designed to produce a flexible nonlinear inverse demand
system that resembles the classical Multinomial Logit model, and discuss several extensions. We
characterize firms competition in quantities based on the inverse demand system. The model is
applied to the Spanish newspaper industry. This is a highly competitive two-sided market whose
revenues are generated from sales and to a larger extent from advertising driven by its circulation.
We then characterize the Perfect Equilibrium by conditional moment conditions, and estimate the
parameters using the Generalized Method of Moments[+][-]