American Economic Review
ISSN 0002-8282 (Print) | ISSN 1944-7981 (Online)
Valuing New Goods in a Model with Complementarity: Online Newspapers
American Economic Review
vol. 97,
no. 3, June 2007
(pp. 713–744)
Abstract
Many important economic questions hinge on the extent to which new goods either crowd out or complement consumption of existing products. Recent methods for studying new goods rule out complementarity by assumption, so their applicability to these questions has been limited. I develop a new model that relaxes this restriction, and use it to study competition between print and online newspapers. Using new micro data from Washington, DC, I estimate the relationship between the print and online papers in demand, the welfare impact of the online paper's introduction, and the expected impact of charging positive online prices. (JEL C25, L11, L82)Citation
Gentzkow, Matthew. 2007. "Valuing New Goods in a Model with Complementarity: Online Newspapers." American Economic Review, 97 (3): 713–744. DOI: 10.1257/aer.97.3.713Additional Materials
JEL Classification
- C25 Single Equation Models; Single Variables: Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- L11 Production, Pricing, and Market Structure; Size Distribution of Firms
- L82 Entertainment; Media