Monopolistic Location Choice in Two-Sided Industries
AbstractWe analyze the optimal location choice of a monopolistic firm that operates two platforms on a two-sided market. We show that the optimal platform locations are equivalent to the one-sided benchmark if both sides are either restricted to single- or multi-homing. In the mixed case (one side single-homes, the other one multi-homes), the optimal platform locations are determined by the relative profitability of both market sides. Our results indicate that modeling mergers on two-sided markets with fixed locations is often inappropriate.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 41761.
Date of creation: 05 Oct 2012
Date of revision:
two-sided markets; location choice; monopoly; merger simulation;
Find related papers by JEL classification:
- K20 - Law and Economics - - Regulation and Business Law - - - General
- L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
- L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
- D42 - Microeconomics - - Market Structure and Pricing - - - Monopoly
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-10-13 (All new papers)
- NEP-BEC-2012-10-13 (Business Economics)
- NEP-COM-2012-10-13 (Industrial Competition)
- NEP-IND-2012-10-13 (Industrial Organization)
- NEP-LAW-2012-10-13 (Law & Economics)
- NEP-URE-2012-10-13 (Urban & Real Estate Economics)
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