Estimating Demand with Multi-Homing in Two-Sided Markets

CentER Discussion Paper Series Nr. 2021-025

44 Pages Posted: 29 Oct 2021

See all articles by Pauline Affeldt

Pauline Affeldt

German Institute for Economic Research (DIW Berlin); Technische Universität Berlin (TU Berlin)

Elena Argentesi

University of Bologna - Department of Economics

Lapo Filistrucchi

University of Florence, Dipartimento di Scienze Economiche ; Tilburg University, TILEC

Multiple version iconThere are 2 versions of this paper

Date Written: September 15, 2021

Abstract

We empirically investigate the relevance of multi-homing in two-sided markets. First, we build a micro-founded structural econometric model that encompasses demand for differentiated products and allows for multi-homing on both sides of the market. We then use an original dataset on the Italian daily newspaper market that includes information on double-homing by readers to estimate readers’ and advertisers’ demand. The results show that an econometric model that does not allow for multihoming is likely to produce biased estimates of demand on both sides of the market. In particular, on the reader side, accounting for multi-homing helps to recognize complementarity between products; on the advertising side, it allows to measure to what extent advertising demand depends on the shares of exclusive and overlapping readers.

Keywords: two-sided markets, platforms, multi-homing, media, advertising

JEL Classification: C51, D43, L13, L82, M37

Suggested Citation

Affeldt, Pauline and Argentesi, Elena and Filistrucchi, Lapo and Filistrucchi, Lapo, Estimating Demand with Multi-Homing in Two-Sided Markets (September 15, 2021). CentER Discussion Paper Series Nr. 2021-025, Available at SSRN: https://ssrn.com/abstract=3924318 or http://dx.doi.org/10.2139/ssrn.3924318

Pauline Affeldt (Contact Author)

German Institute for Economic Research (DIW Berlin) ( email )

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Berlin, 10117
Germany

Technische Universität Berlin (TU Berlin) ( email )

Straße des 17
Juni 135
Berlin, 10623
Germany

Elena Argentesi

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, BO 40141
Italy
+39 051 209 2664 (Phone)
+39 051 209 8040 (Fax)

HOME PAGE: http://https://www.unibo.it/sitoweb/elena.argentesi/en

Lapo Filistrucchi

University of Florence, Dipartimento di Scienze Economiche ( email )

via delle Pandette 9
Florence, Florence IT-50127
Italy
+39 055 2759579 (Phone)
+39 055 2759910 (Fax)

HOME PAGE: http://www.lapofilistrucchi.com

Tilburg University, TILEC ( email )

P.O. Box 90153
Tilburg, Noord-Brabant NL-5000 LE
Netherlands
+31 13 466 3360 (Phone)
+31 13 466 3042 (Fax)

HOME PAGE: http://www.lapofilistrucchi.com

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