Duopolistic Competition between Independent and Collaborative Business-to-Business Marketplaces
AbstractThis paper studies imperfect price competition between two intermediaries in an electronic business-to-business matching market with indirect network externalities. The intermediaries differ with regard to their ownership structure: an independent third party incumbent marketplace competeswith a challenging collaborative buy-side consortium marketplace in terms of attracting buying and selling firms. When firms can register exclusively with at most one intermediary, the incumbent is only able to deter entry if the number of firms taking ownership in the consortium is sufficiently small. Otherwise, the consortium can successfully enter and monopolize the market. When firms can multi-home, i.e. they register simultaneously with both intermediaries, the consortium can always enter while both intermediaries stay in the market with positive profits.
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Bibliographic InfoPaper provided by Ifo Institute for Economic Research at the University of Munich in its series Ifo Working Paper Series with number Ifo Working Paper No. 5.
Date of creation: 2005
Date of revision:
B2B e-commerce; intermediation; network externalities; matching.;
Other versions of this item:
- Sülzle, Kai, 2009. "Duopolistic competition between independent and collaborative business-to-business marketplaces," International Journal of Industrial Organization, Elsevier, vol. 27(5), pages 615-624, September.
- Kai Suelzle, 2004. "Duopolistic Competition between Independent and Collaborative Business-to-Business Marketplaces," Econometric Society 2004 Australasian Meetings 191, Econometric Society.
- C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
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