IDEAS home Printed from https://ideas.repec.org/p/net/wpaper/2113.html
   My bibliography  Save this paper

Platform Competition and Interoperability: The Net Fee Model

Author

Listed:
  • Mehmet Ekmekci

    (Department of Economics, Boston College)

  • Alexander White

    (School of Economics and Management, Tsinghua University)

  • Lingxuan Wu

    (Department of Economics, Harvard University)

Abstract

We study the effects of competition and interoperabilty in platform markets. To do so, we adopt an approach of competition in net fees, which is well-suited to situations where users pay additional charges, after joining, for on-platform interactions. Compared to other approaches, net fees expand the tractable scope to allow platform asymmetry and variable total demand. Regarding competition, our findings raise concerns, including possible dominance-inducing entry, which symmetric models overlook. Our results are more optimistic towards the helpfulness of policies that promote interoperability among platforms, but they urge caution when total demand variability is a significant factor.

Suggested Citation

  • Mehmet Ekmekci & Alexander White & Lingxuan Wu, 2021. "Platform Competition and Interoperability: The Net Fee Model," Working Papers 21-13, NET Institute.
    • Handle: RePEc:net:wpaper:2113
    as

    Download full text from publisher

    File URL: http://www.netinst.org/Wu_21-13.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Jean-Charles Rochet & Jean Tirole, 2014. "Platform Competition in Two-Sided Markets," CPI Journal, Competition Policy International, vol. 10.
    2. Hongru Tan & Julian Wright, 2018. "A Price Theory of Multi-sided Platforms: Comment," American Economic Review, American Economic Association, vol. 108(9), pages 2758-2760, September.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jullien, Bruno & Pavan, Alessandro & Rysman, Marc, 2021. "Two-sided Markets, Pricing, and Network Effects," TSE Working Papers 21-1238, Toulouse School of Economics (TSE).
    2. Andre Veiga, 2014. "Dynamic Platform Design," Working Papers 14-15, NET Institute.
    3. Tan, Hongru & Wright, Julian, 2021. "Pricing distortions in multi-sided platforms," International Journal of Industrial Organization, Elsevier, vol. 79(C).
    4. Peraphan Jittrapirom & Valeria Caiati & Anna-Maria Feneri & Shima Ebrahimigharehbaghi & María J. Alonso González & Jishnu Narayan, 2017. "Mobility as a Service: A Critical Review of Definitions, Assessments of Schemes, and Key Challenges," Urban Planning, Cogitatio Press, vol. 2(2), pages 13-25.

    More about this item

    Keywords

    Platform Competition; Big Tech; Net Fees; Interoperability;
    All these keywords.

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:net:wpaper:2113. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Nicholas Economides (email available below). General contact details of provider: http://www.NETinst.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.