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UID:calendar.126966.field_date.0@www.tse-fr.eu
DTSTAMP:20260611T132333Z
CREATED:20211108T181001Z
DESCRIPTION:Kohei Kawaguchi (Hong Kong University of Science and Technology
 )\, “Merger Analysis in the App Economy: An Empirical Model of Ad-Sponsore
 d Media”\, Economics of Platforms Seminar\, November 16\, 2021\, 14:00–15:
 00\, Zoom Meeting.\n\nIn the mobile app market\, multiple monetizing polic
 ies such as paid and free ad-sponsored models co-exist. This paper propose
 s a novel model of ad-sponsored media with endogenous business model choic
 e\, that is applicable to the mobile app industry. The model defines an eq
 uilibrium over consumers’ downloads and usage decisions and app developers
 ’ pricing and advertising decisions. The cost for a consumer to use an app
  is well defined regardless of the monetizing policy\, enabling a Small\, 
 Non-transitory but Significant Increase in Cost (SSNIC) test for defining 
 an antitrust relevant market. We estimate the model using mobile app data 
 from Japan from 2015 to 2017. The SSNIC test shows that few non-game categ
 ories are relevant markets\, whereas so are many game categories. The rele
 vant market definition based on a full equilibrium simulation is aligned w
 ith this result. Furthermore\, merger simulations show that the welfare da
 mage is more pronounced in categories where the hypothetical monopolist's 
 profit increases more in the SSNIC test\, validating the use of SSNIC test
  as a convenient screening tool. Merger simulations suggest the importance
  of endogenous business model choice\, because price increase is often cau
 sed by the shift from free to paid model. The endogenous business model ch
 oice also affects the implication of the platform transaction fee reductio
 n. Contrary to the standard vertical relation\, in the app economy\, we fi
 nd that a reduction in the transaction fee increases the price\, because a
 pps find it more profitable to charge price rather than show advertisement
 s to consumers.
DTSTART;TZID=Europe/Paris:20211116T140000
DTEND;TZID=Europe/Paris:20211116T150000
LAST-MODIFIED:20260113T095129Z
LOCATION:November 16\, 2021\, 14:00–15:00\, Zoom Meeting
SUMMARY:Economics of Platforms Seminar
URL;TYPE=URI:https://www.tse-fr.eu/seminars/2021-merger-analysis-app-econom
 y-empirical-model-ad-sponsored-media
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