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Can a Platform Make Profit with Consumer' Mobility? A Two-Sided Monopoly Model with Random Endogenous Side-Swiching

Author

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  • Pierre Andreoletti

    (MAPMO - Mathématiques - Analyse, Probabilités, Modélisation - Orléans - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique)

  • Pierre Gaze

    (LEO - Laboratoire d'Économie d'Orleans [UMR7322] - UO - Université d'Orléans - UT - Université de Tours - CNRS - Centre National de la Recherche Scientifique)

  • Maxime Menuet

    (LEO - Laboratoire d'Économie d'Orleans [UMR7322] - UO - Université d'Orléans - UT - Université de Tours - CNRS - Centre National de la Recherche Scientifique)

Abstract

We model a specific two-sided monopoly market in which agents can switch from a side to the other. We define two periods of time. In the first period, agents buy the platform services on each side and in the second period of time, they can possibly enhance their satisfaction by going to the other face of the platform. We analyze the link between mobility, consumer's utility, prices and profit. We show that mobility is a valuable feature which can be compared with an increase of product quality. Finally, the firm is able to capture the mobility in its monopoly's profit. The relative size of each group then appears as a strategical variable for the firm.

Suggested Citation

  • Pierre Andreoletti & Pierre Gaze & Maxime Menuet, 2015. "Can a Platform Make Profit with Consumer' Mobility? A Two-Sided Monopoly Model with Random Endogenous Side-Swiching," Working Papers halshs-01206576, HAL.
    • Handle: RePEc:hal:wpaper:halshs-01206576
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01206576
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    References listed on IDEAS

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    Keywords

    externalities; side-switching; two-sided markets;
    All these keywords.

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