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Platform Ownership Author info | Abstract | Publisher info | Download info | Related research | Statistics Volker Nocke
Martin Peitz
Konrad Stahl
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We develop a theoretical framework of trade on a platform on which buyers and sellers interact, and compare the impact of different platform ownership structures. If two-sided network effects are strong, monopoly ownership induces more trade than dispersed ownership and is therefore socially preferable. Independent of the strength of network effects, monopoly ownership dominates a club-like ownership structure where incumbent owners can exclude potential entrants. Under dispersed ownership, vertical integration tends to increase welfare as it allows the internalization of demand externalities. Allowing incumbent platform owners to exclude potential entrants hurts buyers but can raise welfare. (JEL: L10, D40) (c) 2007 by the European Economic Association.
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Article provided by MIT Press in its journal Journal of the European Economic Association .
Volume (Year): 5 (2007)
Issue (Month): 6 (December)
Pages: 1130-1160
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Paper Volker Nocke & Martin Peitz & Konrad Stahl, 2004.
"Platform Ownership ,"
Discussion Papers
16, SFB/TR 15 Governance and the Efficiency of Economic Systems, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
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