DP5990 Academic Journals as Two-Sided Platforms: Empirical Evidence from Data on French Libraries

Author(s): Pierre Dubois , Adriana Hernandez-Perez , Marc Ivaldi

Publication Date: December 2006

Keyword(s): media industry , two-sided platforms , differentiated products models

JEL(s): L11 , L82

Programme Areas: Industrial Organization

Link to this Page: www.cepr.org/pubs/dps/DP5990.asp.asp

This paper analyzes the demand and cost structure of the French market of academic journals, taking into account its intermediary role between researchers, who are both producers and consumers of knowledge. This two sidedness feature will echoes similar problems already observed in electronic markets - payment card systems, video game consoles, etc. - such as the chicken and egg problem, where readers won’t buy a journal if they do not expect its articles to be academically relevant and researchers, that live under the mantra 'Publish or Perish', will not submit to a journal with either limited public reach or weak reputation. After the merging of several databases, we estimate the aggregated nested logit demand system combined simultaneously with a cost function. We identify the structural parameters of this market and find that price elasticities of demand are quite large and margins relatively low, indicating that this industry experiences competitive constraints.