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.
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| Date of creation: | 00 May 2004 |
| Handle: | RePEc:cor:louvco:2004030 |
| Contact details of provider: | Postal: Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium) Phone: 32(10)474321 Fax: +32 10474304 Web page: http://www.uclouvain.be/core Email: More information through EDIRC
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References listed on IDEAS
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- Graeme Guthrie & Julian Wright, 2003.
"Competing Payment Schemes,"
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- Guthrie, Graeme & Wright, Julian, 2003. "Competing Payment Schemes," Working Papers 173, Department of Economics, The University of Auckland.
- Hausman, Jerry A & Leonard, Gregory K & Tirole, Jean, 2003. " On Nonexclusive Membership in Competing Joint Ventures," RAND Journal of Economics, The RAND Corporation, vol. 34(1), pages 43-62, Spring.
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- Wauthy, Xavier, 1996. "Quality Choice in Models of Vertical Differentiation," Journal of Industrial Economics, Wiley Blackwell, vol. 44(3), pages 345-353, September.
- Wauthy, X., 1994. "Quality Choice in Models of Vertical Differentiation," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1994033, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- Mark Armstrong, 2006. "Competition in two‐sided markets," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 668-691, 09.
- Mark Armstrong, 2005. "Competition in Two-Sided Markets," Industrial Organization 0505009, EconWPA.
- Jean J. Gabszewicz & Xavier Y. Wauthy, 2003. "The option of joint purchase in vertically differentiated markets," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 22(4), pages 817-829, November.
- 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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