IDEAS home Printed from https://ideas.repec.org/a/inm/ormnsc/v71y2025i10p8842-8864.html
   My bibliography  Save this article

Platform Competition and Interoperability: The Net Fee Model

Author

Listed:
  • Mehmet Ekmekci

    (Department of Economics, Boston College, Chestnut Hill, Massachusetts 02467)

  • Alexander White

    (School of Economics and Management and National Institute for Fiscal Studies, Tsinghua University, Beijing 100084, China)

  • Lingxuan Wu

    (Department of Economics, Harvard University, Cambridge, Massachusetts 02138)

Abstract

Is more competition the key to mitigating dominance by large tech platforms? Could regulation of such markets be a better alternative? We study the effects of competition and interoperability regulation in platform markets. To do so, we propose an approach of competition in net fees, which is well-suited to situations in which users pay additional charges, after joining, for on-platform interactions. Compared with existing approaches, the net fee model expands the tractable scope to allow variable total demand, platform asymmetry, and merger analysis. Regarding competition, we find that adding more platforms to the market may lead to the emergence of a dominant firm. In contrast, we find that interoperability can play a key role in reducing market dominance and lowering prices. Broadly speaking, our results favor policy interventions that assure the formidability of the competition that dominant platforms face.

Suggested Citation

  • Mehmet Ekmekci & Alexander White & Lingxuan Wu, 2025. "Platform Competition and Interoperability: The Net Fee Model," Management Science, INFORMS, vol. 71(10), pages 8842-8864, October.
    • Handle: RePEc:inm:ormnsc:v:71:y:2025:i:10:p:8842-8864
    DOI: 10.1287/mnsc.2023.02810
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/mnsc.2023.02810
    Download Restriction: no
    File URL: https://libkey.io/10.1287/mnsc.2023.02810?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:ormnsc:v:71:y:2025:i:10:p:8842-8864. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.