Demand Estimation for Italian Newspapers: The Impact of Bundling

This paper looks at a form of non-price competition that has taken place in the Italian newspaper market, whereby weekly supplements are sold with the newspaper at a higher price. I estimate the impact of this bundling strategy using a nested logit model of demand on a panel of Italian newspapers. I show that supplements increase the readership both in the weekday of issue and in the average weekday. This suggests that supplements are a way to attract new readers for the newspaper. This promotional effect is due both to business stealing and to market expansion.