This paper analyzes the behavior of horizontal B2B marketplaces along the supply chain in case a vertical intermediary tries to enter by attracting industry-specific buy-side and sell-side firms. It will be shown that an entrant can only integrate all firms along the vertical production chain in case the industry is strong buy-side dominated. For the remaining scenarios we will determine different levels of integration for buy-side and sell-side dominated branches, in which firms from upper stages will stay at the incumbent. Moreover, we will show that horizontal marketplaces for MRO and other simple goods will be driven out of the market in any case.
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Find related papers by JEL classification: C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory 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 L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
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