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Spatial competition among multiple platforms


  • Toshiki Kodera

    () (Graduate School of Economics, Nagoya University)


We study spatial competition in two-sided markets, in which platforms engage in price competition in a circular city. After analyzing the pricing and profits of the unique symmetric equilibrium for a given number of platforms, we derive the number of platforms under free entry and compare it with the social optimum. We consider the case with or without a price restriction. In contrast to the excess entry result in Salop's (1979) model, the number of platforms is smaller than the social optimum if a minimum price binds, and if cross-group network effects are sufficiently large for a group of agents.

Suggested Citation

  • Toshiki Kodera, 2010. "Spatial competition among multiple platforms," Economics Bulletin, AccessEcon, vol. 30(2), pages 1516-1525.
  • Handle: RePEc:ebl:ecbull:eb-09-00511

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    Cited by:

    1. Wenjiao Che & Toshiki Kodera, 2014. "Product differentiation and advertising in multiple markets," Economics Bulletin, AccessEcon, vol. 34(1), pages 400-408.

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    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance


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