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

Listed author(s):
  • Pierre Andreoletti

    ()

    (MAPMO - Mathématiques - Analyse, Probabilités, Modélisation - Orléans - CNRS - UO - Université d'Orléans)

  • Pierre Gaze

    ()

    (LEO - Laboratoire d'Economie d'Orléans - CNRS - Université d'Orléans)

  • Maxime Menuet

    (LEO - Laboratoire d'Economie d'Orléans - CNRS - Université d'Orléans)

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.

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File URL: https://halshs.archives-ouvertes.fr/halshs-01206576/document
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Paper provided by HAL in its series Working Papers with number halshs-01206576.

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Date of creation: 2015
Handle: RePEc:hal:wpaper:halshs-01206576
Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01206576
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  1. Amelio, Andrea & Jullien, Bruno, 2012. "Tying and freebies in two-sided markets," International Journal of Industrial Organization, Elsevier, vol. 30(5), pages 436-446.
  2. Jean‐Charles Rochet & Jean Tirole, 2006. "Two‐sided markets: a progress report," RAND Journal of Economics, RAND Corporation, vol. 37(3), pages 645-667, September.
  3. Jean-Charles Rochet & Jean Tirole, 2014. "Platform Competition in Two-Sided Markets," CPI Journal, Competition Policy International, vol. 10.
  4. Caillaud, Bernard & Jullien, Bruno, 2003. " Chicken & Egg: Competition among Intermediation Service Providers," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 309-328, Summer.
  5. repec:rje:randje:v:37:y:2006:3:p:720-737 is not listed on IDEAS
  6. Chakravorti Sujit & Roson Roberto, 2006. "Platform Competition in Two-Sided Markets: The Case of Payment Networks," Review of Network Economics, De Gruyter, vol. 5(1), pages 1-25, March.
  7. Roson Roberto, 2005. "Two-Sided Markets: A Tentative Survey," Review of Network Economics, De Gruyter, vol. 4(2), pages 1-19, June.
  8. 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.
  9. Schmalensee, Richard, 2002. "Payment Systems and Interchange Fees," Journal of Industrial Economics, Wiley Blackwell, vol. 50(2), pages 103-122, June.
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