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Platform Competition in Two Sided Markets

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  • Jean-Charles Rochet

    ()

  • Jean Triole

Abstract

Many if not most markets with network externalities are two-sided. To succeed, platforms in industries such as software, portals and media, payment systems and the Internet, must “get both sides of the market on board”. Accordingly, platforms devote much attention to their business model, that is to how they court each side while making money overall. The paper builds a model of platform competition with two-sided markets. It unveils the determinants of price allocation and end-user surplus for different governance structures (profit-maximizing platforms and not-for-profit joint undertakings), and compares the outcomes with those under an integrated monopolist and a Ramsey planner.

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Bibliographic Info

Paper provided by Financial Markets Group in its series FMG Discussion Papers with number dp409.

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Date of creation: Feb 2002
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Handle: RePEc:fmg:fmgdps:dp409

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Web page: http://www.lse.ac.uk/fmg/

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  2. Caillaud, Bernard & Jullien, Bruno, 2001. "Chicken and Egg: Competing Matchmakers," CEPR Discussion Papers 2885, C.E.P.R. Discussion Papers.
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  10. Wilson, Robert, 1997. "Nonlinear Pricing," OUP Catalogue, Oxford University Press, number 9780195115826.
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  15. Mark Armstrong, 2006. "Competition in two‐sided markets," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 668-691, 09.
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  17. Yanelle, Marie-Odile, 1997. "Banking Competition and Market Efficiency," Review of Economic Studies, Wiley Blackwell, vol. 64(2), pages 215-39, April.
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  1. ¿Regreso al pasado en las empresas del futuro? Las dudosas consecuencias de las estrategias de diversificación de los gigantes de Internet: Amazon, Google y Facebook
    by Juan Santaló in Nada Es Gratis on 2014-06-25 06:00:33
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