Publications
Publications
- April 2021
- Strategic Management Journal
Homing and Platform Responses to Entry: Historical Evidence from the U.S. Newspaper Industry
By: K. Francis Park, Robert Seamans and Feng Zhu
Abstract
We examine how heterogeneity in customers’ tendencies to single-home or multi-home affects a platform’s competitive responses to new entrants in the market. We first develop a formal model to generate predictions about how a platform will respond. We then empirically test it, leveraging a historical setting: TV station entry into local U.S. newspaper markets from 1945 to 1963. A notable feature of this setting is a quasi-natural experiment: the staggered geographic and temporal rollout of TV stations that was temporarily halted during the Korean War. We find that platform firms indeed take their customers’ homing tendencies into account in their responses to competition: after a TV station enters the newspaper market, newspaper firms with more single-homing consumers had lower subscription prices, circulations, and advertising rates.
Keywords
Single-homing; Multi-homing; Platform Responses; Newpaper; Television; Market Platforms; Market Entry and Exit; Newspapers; Television Entertainment; History; Journalism and News Industry; Media and Broadcasting Industry
Citation
Park, K. Francis, Robert Seamans, and Feng Zhu. "Homing and Platform Responses to Entry: Historical Evidence from the U.S. Newspaper Industry." Strategic Management Journal 42, no. 4 (April 2021): 684–709.
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