This paper develops a structural model of newspaper markets to analyze the effects of ownership consolidation, taking into account not only firms ’ price adjustments but also the adjustments in newspaper characteristics. A new data set on newspaper prices and characteristics is used to estimate the model. The paper then simulates the effect of a merger in the Minneapolis newspaper market and studies how welfare effects of mergers vary with market characteristics. It finds that ignoring adjustments of product characteristics causes substantial differences in estimated effects of mergers
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