Two-sided markets and price competition with multi-homing
We model duopoly competition between two platforms.They operate in a two-sided market where agents are heterogeneous on both sides of the market and are allowed to mulithome. Network effects are captured within a vertical differentiation framework.Under single-homing there exists an interior equilibrium where networks exhibit asymmetric sizes and both firms enjoy positive profits.When all agents are allowed to patronize the two platforms, we show that in equilibrium multi-homing takes place on one side of the market only. Moreover, the only equilibrium exhibiting positive profits for both platforms replicates the collusive outcome.
|Date of creation:||00 May 2004|
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- GABSZEWICZ, Jean J. & WAUTHY, Xavier Y., "undated". "The option of joint purchase in vertically differentiated markets," CORE Discussion Papers RP 1667, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- GABSZEWICZ, Jean J. & WAUTHY, Xavier Y., 2001. "The option of joint purchase in vertically differentiated markets," CORE Discussion Papers 2001013, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Evans David S., 2003. "Some Empirical Aspects of Multi-sided Platform Industries," Review of Network Economics, De Gruyter, vol. 2(3), pages 1-19, September. Full references (including those not matched with items on IDEAS)
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