Cost of the mission of transport and delivery of printed press: theory and evidence

In the first part, we examine from a theoretical perspective how the cost of the mission of postal transport and delivery of newspapers should be defined and by which factors it is determined. In particular we show that a crucial ingredient in the determination of this cost is the variation in aggregate demand induced by an increase in the uniform transportation and delivery rate. In the second part, we empirically analyze the French print media market by modeling the existence of a reciprocal effect between the size of the readership and the amount of advertising. For this two-sided platform, we model the impact of the readership on the level of advertising demand and the intensity of advertising on the number of periodicals sold

Competition for versus in the market of long-distance passenger rail services

This paper is aimed at evaluating the net gains and trade-offs at stake in implementing the competition of the rail mode in the long distance passenger market either by means of franchise or by an open access mechanism. We simulate the outcomes of competition in and for the market using a differentiated-products oligopoly model allowing for inter- and intra-modal competition in a long distance passenger market. Specifically we first calibrate the model using data describing high speed lines in France and show that the incumbent railway operator’s strategy does not simply boil down to a short-term profit maximization (e.g., because of existing regulation or limit-pricing strategy). This yields two important results when simulating competition. First, whether it is for or in the market, the opening to competition does not guarantee a decrease in prices in favor of passengers. Second, the effects of opening up to competition for the market are relatively predictable and potentially positive, while those of opening up to competition in the market remain very uncertain

Competition for versus in the market of long-distance passenger rail services

This paper is aimed at evaluating the net gains and trade-offs at stake in implementing the competition of the rail mode in the long distance passenger market either by means of franchise or by an open access mechanism. We simulate the outcomes of competition in and for the market using a differentiated-products oligopoly model allowing for inter- and intra-modal competition in a long distance passenger market. Specifically we first calibrate the model using data describing high speed lines in France and show that the incumbent railway operator’s strategy does not simply boil down to a short-term profit maximization (e.g., because of existing regulation or limit-pricing strategy). This yields two important results when simulating competition. First, whether it is for or in the market, the opening to competition does not guarantee a decrease in prices in favor of passengers. Second, the effects of opening up to competition for the market are relatively predictable and potentially positive, while those of opening up to competition in the market remain very uncertain

The Differentiated Effect of Advertising on Readership: Evidence from a Two-Sided Market Approach

In this paper, we empirically analyze the French print media market by modeling the existence of a reciprocal effect between the size of the readership and the amount of advertising. For this two-sided platform, we measure the cross-effects of advertising on the readership and periodical popularity on advertising. By estimating a structural model of simultaneous demand equations, we quantify some crucial elements in designing pricing and product-differentiating strategies. We measure the impact of advertising on reader demand and find in the data that it has opposite effects depending on whether the publication presents informational or entertaining content. By taking into account the market interactions, we compute price and advertising elasticities. Our results show that advertisers targeting a specific category of the audience would choose its corresponding periodicals and would trade off the size of the readership for these periodicals and the advertising insert price changes. Also, advertising campaigns aimed at reaching a broader spectrum of the population should focus on popular titles and on titles for which demand is inelastic to ensure a more consistent impact of the campaign. Finally, for magazines with low price demand elasticity on the readers’ side, editors’ revenues could be improved by increasing prices. These combined effects should allow a publisher to generate positive margins from both sides of the market, for certain content categories

Dynamic Price Competition in the Air Transport Market: An Analysis on Long-Haul Routes

International audienceThe pricing policy of airlines is based on revenue management. Revenue management analysts daily observe competitive prices and strategically adjust their own tariffs. One could expect this behavior to lead to a sound homogenization of airline prices evolution while competing on a market. We test empirically whether airline pricing strategies evolve on a similar manner, on a particular set of long-haul routes. Using new and original data including information on ticket prices paid, purchasing and departure dates, we estimate a model for the effect of dynamic factors on the evolution of ticket prices, based on economic theory. We use a 3 rd degree polynomial regression between prices and number of days to departure for each airline operating on the routes, and control for key revenue management variables, competition factors and individual effects. Our results show that competing airlines pricing strategies are statistically distinct during their ticket sale period. Airlines maximize their profits by sequentially increasing or decreasing their prices, but they do so in a non-synchronized fashion, and with different magnitudes

Dynamic Price Competition in the Air Transport Market: An Analysis on Long-Haul Routes

International audienceThe pricing policy of airlines is based on revenue management. Revenue management analysts daily observe competitive prices and strategically adjust their own tariffs. One could expect this behavior to lead to a sound homogenization of airline prices evolution while competing on a market. We test empirically whether airline pricing strategies evolve on a similar manner, on a particular set of long-haul routes. Using new and original data including information on ticket prices paid, purchasing and departure dates, we estimate a model for the effect of dynamic factors on the evolution of ticket prices, based on economic theory. We use a 3 rd degree polynomial regression between prices and number of days to departure for each airline operating on the routes, and control for key revenue management variables, competition factors and individual effects. Our results show that competing airlines pricing strategies are statistically distinct during their ticket sale period. Airlines maximize their profits by sequentially increasing or decreasing their prices, but they do so in a non-synchronized fashion, and with different magnitudes

Competition for versus in the market of long-distance passenger rail services

This paper is aimed at evaluating the net gains and trade-offs at stake in implementing the competition of the rail mode in the long distance passenger market either by means of franchise or by an open access mechanism. We simulate the outcomes of competition in and for the market using a differentiated-products oligopoly model allowing for inter- and intra-modal competition in a long distance passenger market. Specifically we first calibrate the model using data describing high speed lines in France and show that the incumbent railway operator’s strategy does not simply boil down to a short-term profit maximization (e.g., because of existing regulation or limit-pricing strategy). This yields two important results when simulating competition. First, whether it is for or in the market, the opening to competition does not guarantee a decrease in prices in favor of passengers. Second, the effects of opening up to competition for the market are relatively predictable and potentially positive, while those of opening up to competition in the market remain very uncertain