IDEAS home Printed from https://ideas.repec.org/p/cpr/ceprdp/19687.html

First-Party Complements in Platform Markets: The Role of Competition

Author

Listed:
  • Rusakov, Alexey
  • Kretschmer, Tobias

Abstract

First-party complements both create and capture value in platform markets. Which of these motives dominates depends on the platform’s competitive position on the user and the complementor side. We posit that platform owners release more first-party complements in product categories with a high share of users compared to competing platforms. Conversely, platform owners release more first-party complements if the platform is in a weak competitive position in terms of its complements. This suggests that platforms release first-party complements to create value if they are weak on the complementor side, and to capture value if they are strong on the user side. Using data from video game consoles, we find our hypotheses confirmed and integrate competition between platforms with competition between first-party and third-party complements.

Suggested Citation

  • Rusakov, Alexey & Kretschmer, Tobias, 2024. "First-Party Complements in Platform Markets: The Role of Competition," CEPR Discussion Papers 19687, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:19687
    as

    Download full text from publisher

    File URL: https://cepr.org/publications/DP19687
    Download Restriction: no
    ---><---

    More about this item

    JEL classification:

    • L82 - Industrial Organization - - Industry Studies: Services - - - Entertainment; Media
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • L22 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Organization and Market Structure
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cpr:ceprdp:19687. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: CEPR (email available below). General contact details of provider: https://cepr.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.