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Market entry into emerging two-sided markets

Author

Listed:
  • Ralf Dewenter

    (University of Duesseldorf)

  • Juergen Roesch

    (University of Duesseldorf)

Abstract

This note analyzes the impact of indirect network effects in emerging two-sided markets on prices, quantities, profits and market entry assuming market enlargement induced by indirect network effects. Only if indirect network effects are small, the conventional results of market entry apply, although weakened. If, however, the interconnection between the markets is strong, tighter market structures or even monopolies can be optimal.

Suggested Citation

  • Ralf Dewenter & Juergen Roesch, 2012. "Market entry into emerging two-sided markets," Economics Bulletin, AccessEcon, vol. 32(3), pages 2343-2352.
    • Handle: RePEc:ebl:ecbull:eb-12-00572
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2012/Volume32/EB-12-V32-I3-P227.pdf
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    References listed on IDEAS

    as
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    4. Caillaud, Bernard & Jullien, Bruno, 2003. "Chicken & Egg: Competition among Intermediation Service Providers," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 309-328, Summer.
    5. Jean J. Gabszewicz & Didier Laussel & Nathalie Sonnac, 2004. "Programming and Advertising Competition in the Broadcasting Industry," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 13(4), pages 657-669, December.
    6. Seabright,Paul & von Hagen,Jürgen (ed.), 2007. "The Economic Regulation of Broadcasting Markets," Cambridge Books, Cambridge University Press, number 9780521874052.
    7. Seabright,Paul & von Hagen,Jürgen (ed.), 2007. "The Economic Regulation of Broadcasting Markets," Cambridge Books, Cambridge University Press, number 9780521696340.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Dewenter Ralf & Rösch Jürgen, 2016. "Net Neutrality and the Incentives (Not) to Exclude Competitors," Review of Economics, De Gruyter, vol. 67(2), pages 209-229, August.
    2. Lei Bao & Yulin Zhang & Vitor Miguel Ribeiro, 2018. "Observability of Incentive Contract and Platform Competition," Australian Economic Papers, Wiley Blackwell, vol. 57(2), pages 154-180, June.
    3. Budzinski Oliver & Köhler Karoline Henrike, 2015. "Is Amazon The Next Google?," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 66(1), pages 263-288, January.

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    More about this item

    Keywords

    Market entry; two-sided markets; emerging markets.;
    All these keywords.

    JEL classification:

    • L0 - Industrial Organization - - General
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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