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The Monopoly Benchmark on Two-Sided Markets

Author

Listed:
  • Christopher Müller

    (Faculty of Economics and Business Administration, Johann Wolfgang Goethe-University)

  • Enrico Böhme

    (Faculty of Economics and Business Administration, University of Marburg)

Abstract

The literature on the effects of market concentration in platform industries or two-sided markets often compares the competitive outcome against a benchmark. This benchmark is either the “joint management” solution in which one decision maker runs all platforms or a “pure” monopoly with just one platform. Literature has not generally discussed which benchmark is the appropriate one, i.e. how many platforms the monopolist will operate. In this paper we show that the optimal number of platforms depends on whether agents multi- or singlehome, whether the network externalities are positive or negative, and in some cases on the properties of the demand functions.

Suggested Citation

  • Christopher Müller & Enrico Böhme, 2014. "The Monopoly Benchmark on Two-Sided Markets," Finnish Economic Papers, Finnish Economic Association, vol. 27(1), pages 56-69, Autumn.
    • Handle: RePEc:fep:journl:v:27:y:2014:i:1:p:56-69
    as

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    References listed on IDEAS

    as
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    More about this item

    JEL classification:

    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • K20 - Law and Economics - - Regulation and Business Law - - - General
    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation

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