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Duopolistic competition between independent and collaborative business-to-business marketplaces

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  • Sülzle, Kai

Abstract

This paper studies imperfect price competition between two intermediaries in an electronic business-to-business matching market with indirect network externalities. The intermediaries have different ownership structures: an independent incumbent competes with a collaborative buy side consortium to attract buying and selling firms. When firms can register exclusively with one intermediary, the incumbent can deter entry only if the number of consortium owners is sufficiently small. Otherwise, the consortium can enter and monopolize the market. When firms can register with both intermediaries simultaneously, the consortium can always enter and both intermediaries stay in the market with positive profits.

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  • Sülzle, Kai, 2009. "Duopolistic competition between independent and collaborative business-to-business marketplaces," International Journal of Industrial Organization, Elsevier, vol. 27(5), pages 615-624, September.
    • Handle: RePEc:eee:indorg:v:27:y:2009:i:5:p:615-624
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    Cited by:

    1. Henseler, Marco, 2006. "Horizontal versus Vertical Electronic Business-to-Business Marketplaces," MPRA Paper 40853, University Library of Munich, Germany.

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    More about this item

    Keywords

    B2B e-commerce Intermediation Network externalities;

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • 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

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