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Two‐sided markets: a progress report

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  • Jean‐Charles Rochet
  • Jean Tirole

Abstract

I describe a model of entry with endogenous product-type choices. These choices are formalized as the outcomes of a game of incomplete information in which rivals' differentiated products have nonuniform competitive effects on profits. I estimate the model for location choices in the video retail industry using a nested fixed-point algorithm solution. The results imply significant returns to product differentiation. Simulations illustrate the trade off between demand and intensified competition and the extent to which markets with more scope for differentiation support greater entry. Ordering information: This article can be ordered from http://gemini.econ.umd.edu/cgi-bin/rje_online.cgi?action=buy&year=2006&issue=aut&page=645&tid=30492&sc=1869P1N9 .

(This abstract was borrowed from another version of this item.)

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File URL: http://hdl.handle.net/10.1111/j.1756-2171.2006.tb00036.x
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Bibliographic Info

Article provided by RAND Corporation in its journal RAND Journal of Economics.

Volume (Year): 37 (2006)
Issue (Month): 3 (09)
Pages: 645-667

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Handle: RePEc:bla:randje:v:37:y:2006:i:3:p:645-667

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References

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