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Duopolistic Competition between Independent and Collaborative Business-to-Business Marketplaces

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  • Kai Sülzle

Abstract

This paper studies imperfect price competition between two intermediaries in an electronic business-to-business matching market with indirect network externalities. The intermediaries differ with regard to their ownership structure: an independent third party incumbent marketplace competes with a challenging collaborative buy-side consortium marketplace in terms of attracting buying and selling firms. When firms can register exclusively with at most one intermediary, the incumbent is only able to deter entry if the number of firms taking ownership in the consortium is sufficiently small. Otherwise, the consortium can successfully enter and monopolize the market. When firms can multi-home, i.e. they register simultaneously with both intermediaries, the consortium can always enter while both intermediaries stay in the market with positive profits.

Suggested Citation

  • Kai Sülzle, 2005. "Duopolistic Competition between Independent and Collaborative Business-to-Business Marketplaces," ifo Working Paper Series 5, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
  • Handle: RePEc:ces:ifowps:_5
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    References listed on IDEAS

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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; matching.;
    All these keywords.

    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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