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Who Benefits from Increased Competition Among Sellers on B2C Platforms?

Author

Listed:
  • BELLEFLAMME, Paul

    (Université catholique de Louvain, CORE, Belgium)

  • TOULEMONDE, Eric

    (University of Namur)

Abstract

We introduce within-group external effects in the two-sided singlehoming model of Armstrong (2006). First, we propose a general characterization of the platform access fees at the symmetric equilibrium of the game. Second, we combine this general formulation with a specific modeling of the relationship between buyers and sellers on B2C platforms, so as to analyze how changes in the underlying characteristics of the product market affect the equilibrium of the game. We show that sellers may be better off, and buyers worse off, in markets with more sellers. We also show that sellers and buyers prefer full product differentiation while platforms prefer no differentiation.

Suggested Citation

  • BELLEFLAMME, Paul & TOULEMONDE, Eric, 2016. "Who Benefits from Increased Competition Among Sellers on B2C Platforms?," LIDAM Discussion Papers CORE 2016031, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2016031
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    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp2016.html
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    Citations

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    Cited by:

    1. Paul Belleflamme & Martin Peitz, 2019. "Managing competition on a two‐sided platform," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(1), pages 5-22, January.
    2. Federico Etro, 2023. "Hybrid Marketplaces with Free Entry of Sellers," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 62(2), pages 119-148, March.
    3. Neaketa Chawla & Debasis Mondal, 2024. "Seller competition on two-sided platforms," Journal of Economics, Springer, vol. 142(3), pages 213-245, August.
    4. repec:rnp:ecopol:ep1512 is not listed on IDEAS
    5. Francesco Angelini & Massimiliano Castellani & Lorenzo Zirulia, 2025. "Platform investment and seller competition in two-sided markets," Journal of Economics, Springer, vol. 144(1), pages 1-29, January.
    6. Badran, Mona Farid, 2018. "Digital Platforms in Developing Countries: "A Case-Study of Jumia Egypt"," 29th European Regional ITS Conference, Trento 2018 184929, International Telecommunications Society (ITS).
    7. Etro, Federico, 2023. "Platform competition with free entry of sellers," International Journal of Industrial Organization, Elsevier, vol. 89(C).
    8. Etro, Federico, 2021. "Device-funded vs ad-funded platforms," International Journal of Industrial Organization, Elsevier, vol. 75(C).
    9. Federico Etro, 2021. "Product selection in online marketplaces," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 30(3), pages 614-637, August.
    10. Badran, Mona Farid, 2021. "Digital platforms in Africa: A case-study of Jumia Egypt's digital platform," Telecommunications Policy, Elsevier, vol. 45(3).

    More about this item

    Keywords

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    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

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