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Competing Matchmakers: An Experimental Analysis

Author

Listed:
  • Tanjim Hossain

    () (Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada)

  • Dylan Minor

    () (Kellogg School of Management, Northwestern University, Evanston, Illinois 60208)

  • John Morgan

    () (Haas School of Business, University of California, Berkeley, Berkeley, California 94720)

Abstract

Platform competition is ubiquitous, yet platform market structure is little understood. Theory models typically suffer from equilibrium multiplicity--platforms might coexist or the market might tip to either platform. We use laboratory experiments to study the outcomes of platform competition. When platforms are primarily vertically differentiated, we find that even when platform coexistence is theoretically possible, markets inevitably tip to the more efficient platform. When platforms are primarily horizontally differentiated, so there is no single efficient platform, we find strong evidence of equilibrium coexistence. This paper was accepted by Peter Wakker, decision analysis.

Suggested Citation

  • Tanjim Hossain & Dylan Minor & John Morgan, 2011. "Competing Matchmakers: An Experimental Analysis," Management Science, INFORMS, vol. 57(11), pages 1913-1925, November.
  • Handle: RePEc:inm:ormnsc:v:57:y:2011:i:11:p:1913-1925
    as

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    File URL: http://dx.doi.org/10.1287/mnsc.1110.1407
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Wiebke Roß & Jens Weghake, 2018. "Wa(h)re Liebe: Was Online-Dating-Plattformen über zweiseitige Märkte lehren," TUC Working Papers in Economics 0017, Abteilung für Volkswirtschaftslehre, Technische Universität Clausthal (Department of Economics, Technical University Clausthal).
    2. Hagiu, Andrei & Jullien, Bruno, 2014. "Search diversion and platform competition," International Journal of Industrial Organization, Elsevier, vol. 33(C), pages 48-60.
    3. Heggedal, Tom-Reiel & Helland, Leif, 2014. "Platform selection in the lab," Journal of Economic Behavior & Organization, Elsevier, vol. 99(C), pages 168-177.
    4. Huotari, Pontus & Järvi, Kati & Kortelainen, Samuli & Huhtamäki, Jukka, 2017. "Winner does not take all: Selective attention and local bias in platform-based markets," Technological Forecasting and Social Change, Elsevier, vol. 114(C), pages 313-326.
    5. Hagiu, Andrei & Jullien, Bruno, 2013. "Strategic Search Diversion, Product Affiliation and Platform Competition," CEPR Discussion Papers 9451, C.E.P.R. Discussion Papers.
    6. Avi Goldfarb & Teck-Hua Ho & Wilfred Amaldoss & Alexander Brown & Yan Chen & Tony Cui & Alberto Galasso & Tanjim Hossain & Ming Hsu & Noah Lim & Mo Xiao & Botao Yang, 2012. "Behavioral models of managerial decision-making," Marketing Letters, Springer, vol. 23(2), pages 405-421, June.

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