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Duopolistic Competition between Independent and Collaborative Business-to-Business Marketplaces

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  • Kai Suelzle

Abstract

This 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 competes with 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 agents 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 Info

Paper provided by Econometric Society in its series Econometric Society 2004 Australasian Meetings with number 191.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:ausm04:191

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Keywords: B2B e-commerce; intermediation; network externalities; matching;

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  1. Jackson, Matthew O., 1998. "The Evolution of Social and Economic Networks," Working Papers, California Institute of Technology, Division of the Humanities and Social Sciences 1044, California Institute of Technology, Division of the Humanities and Social Sciences.
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Cited by:
  1. Henseler, Marco, 2006. "Horizontal versus Vertical Electronic Business-to-Business Marketplaces," MPRA Paper 40853, University Library of Munich, Germany.

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