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Cross-Platform Entry Effects of Commission Rates: Evidence from Mobile Applications in China

Author

Listed:
  • Jiayi Hou
  • Xuan Teng
  • Xuan Wang

Abstract

This paper studies how commission rates affect app entry across platforms. We examine an increase in Android game commission rate from 30% to 50% in China in 2014 and its impact on Android and iOS app stores, separately, in a difference-in-differences framework. We find a direct negative entry effect on Android by 47%. Meanwhile, the number of new games on the iOS App Store significantly decreased by 30% due to the higher Android commission rate, implying a negative cross-platform spillover effect. Moreover, the share of high-quality new games significantly decreased by 12%, indicating that higher commission rates discourage developers’ quality provision.

Suggested Citation

  • Jiayi Hou & Xuan Teng & Xuan Wang, 2026. "Cross-Platform Entry Effects of Commission Rates: Evidence from Mobile Applications in China," CESifo Working Paper Series 12378, CESifo.
    • Handle: RePEc:ces:ceswps:_12378
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • K21 - Law and Economics - - Regulation and Business Law - - - Antitrust Law
    • L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
    • L42 - Industrial Organization - - Antitrust Issues and Policies - - - Vertical Restraints; Resale Price Maintenance; Quantity Discounts
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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