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Market entry into emerging two-sided markets

Author

Listed:
  • Ralf Dewenter

    () (University of Duesseldorf)

  • Juergen Roesch

    () (University of Duesseldorf)

Abstract

This note analyzes the impact of indirect network effects in emerging two-sided markets on prices, quantities, profits and market entry assuming market enlargement induced by indirect network effects. Only if indirect network effects are small, the conventional results of market entry apply, although weakened. If, however, the interconnection between the markets is strong, tighter market structures or even monopolies can be optimal.

Suggested Citation

  • Ralf Dewenter & Juergen Roesch, 2012. "Market entry into emerging two-sided markets," Economics Bulletin, AccessEcon, vol. 32(3), pages 2343-2352.
  • Handle: RePEc:ebl:ecbull:eb-12-00572
    as

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    File URL: http://www.accessecon.com/Pubs/EB/2012/Volume32/EB-12-V32-I3-P227.pdf
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    References listed on IDEAS

    as
    1. Ettore Damiano & Li Hao, 2008. "Competing Matchmaking," Journal of the European Economic Association, MIT Press, vol. 6(4), pages 789-818, June.
    2. Jean-Charles Rochet & Jean Tirole, 2014. "Platform Competition in Two-Sided Markets," CPI Journal, Competition Policy International, vol. 10.
    3. Claude Crampes & Carole Haritchabalet & Bruno Jullien, 2005. "Advertising, Competition and Entry in Media Industries," CESifo Working Paper Series 1591, CESifo Group Munich.
    4. Caillaud, Bernard & Jullien, Bruno, 2003. " Chicken & Egg: Competition among Intermediation Service Providers," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 309-328, Summer.
    5. Jean J. Gabszewicz & Didier Laussel & Nathalie Sonnac, 2004. "Programming and Advertising Competition in the Broadcasting Industry," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 13(4), pages 657-669, December.
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    Cited by:

    1. Budzinski Oliver & Köhler Karoline Henrike, 2015. "Is Amazon The Next Google?," ORDO. Jahrbuch für die Ordnung von Wirtschaft und Gesellschaft, De Gruyter, vol. 66(1), pages 263-288, January.

    More about this item

    Keywords

    Market entry; two-sided markets; emerging markets.;

    JEL classification:

    • L0 - Industrial Organization - - General
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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