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e-Book Platform Competition in the Presence of Two-Sided Network Externalities

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  • Yabing Jiang

    ()
    (Lutgert College of Business, Florida Gulf Coast University)

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    Abstract

    The success of the Kindle e-book platform and the increased popularity of e-books among members of the reading community have attracted extensive interest in the high-tech industry. New platform providers are jumping in the market to compete for device and e-book sales. In this paper, we model the direct competition in the e-book platform market through a two-sided network externality model. We show that publishers can influence consumers’ e-book platform adoption decisions and the total e-book sales by strategically deciding the size of contents available on each platform.

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    File URL: http://www.NETinst.org/Jiang_12-19.pdf
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    Bibliographic Info

    Paper provided by NET Institute in its series Working Papers with number 12-19.

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    Length: 28 pages
    Date of creation: Sep 2012
    Date of revision:
    Handle: RePEc:net:wpaper:1219

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    Web page: http://www.NETinst.org/

    Related research

    Keywords: analytical modeling; e-book technology; network externality; platform competition; product differentiation; two-sided market;

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    1. Jean-Charles Rochet & Jean Triole, 2002. "Platform Competition in Two Sided Markets," FMG Discussion Papers dp409, Financial Markets Group.
    2. Caillaud, Bernard & Jullien, Bruno, 2003. " Chicken & Egg: Competition among Intermediation Service Providers," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 309-28, Summer.
    3. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-40, June.
    4. Geoffrey G. Parker & Marshall W. Van Alstyne, 2005. "Two-Sided Network Effects: A Theory of Information Product Design," Management Science, INFORMS, vol. 51(10), pages 1494-1504, October.
    5. repec:rje:randje:v:37:y:2006:3:p:645-667 is not listed on IDEAS
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