Competition Between Networks: A Study of the Market for Yellow Pages Export

@article{Rysman_2004_CompetitionBetweenYellowPages, abstract = {This paper estimates the importance of network effects in the market for Yellow Pages. I estimate three simultaneous equations: consumer demand for usage of a directory, advertiser demand for advertising and a publisher's first-order condition (derived from profit-maximizing behaviour). Estimation shows that advertisers value consumer usage and that consumers value advertising, implying a network effect. I find that internalizing network effects would significantly increase surplus. As an application, I consider whether the market benefits from monopoly (which takes advantage of network effects) or oligopoly (which reduces market power). I find that a more competitive market is preferable.}, author = {Rysman, Marc}, citeulike-article-id = {1210911}, citeulike-linkout-0 = {http://www.blackwell-synergy.com/doi/abs/10.1111/0034-6527.00512}, citeulike-linkout-1 = {http://dx.doi.org/10.1111/0034-6527.00512}, citeulike-linkout-2 = {http://www3.interscience.wiley.com/cgi-bin/abstract/118761871/ABSTRACT}, doi = {10.1111/0034-6527.00512}, journal = {Review of Economic Studies}, keywords = {advertising, demand, io, market, network\_externality, oligopoly, paper\_02\_search\_engine\_competition, product\_differentiation, supply, two\_sided}, number = {2}, pages = {483--512}, posted-at = {2008-07-03 15:44:07}, priority = {4}, title = {Competition Between Networks: A Study of the Market for Yellow Pages}, url = {http://dx.doi.org/10.1111/0034-6527.00512}, volume = {71}, year = {2004} }

TY - JOUR ID - Rysman_2004_CompetitionBetweenYellowPages L3 - citeulike-article-id:1210911 N2 - This paper estimates the importance of network effects in the market for Yellow Pages. I estimate three simultaneous equations: consumer demand for usage of a directory, advertiser demand for advertising and a publisher's first-order condition (derived from profit-maximizing behaviour). Estimation shows that advertisers value consumer usage and that consumers value advertising, implying a network effect. I find that internalizing network effects would significantly increase surplus. As an application, I consider whether the market benefits from monopoly (which takes advantage of network effects) or oligopoly (which reduces market power). I find that a more competitive market is preferable. IS - 2 JF - Review of Economic Studies EP - 512 TI - Competition Between Networks: A Study of the Market for Yellow Pages VL - 71 SP - 483 KW - advertising KW - demand KW - io KW - market KW - network_externality KW - oligopoly KW - paper_02_search_engine_competition KW - product_differentiation KW - supply KW - two_sided AU - Rysman, Marc PY - 2004/// UR - http://dx.doi.org/10.1111/0034-6527.00512 ER -