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Platform Ownership

Author

Listed:
  • Volker Nocke

    (Department of Economics, University of Pennsylvania)

  • Martin Peitz

    (Department of Economics, University of Mannheim)

  • Konrad Stahl

    (Department of Economics, University of Mannheim)

Abstract

We develop a general theoretical framework of trade on a platform on which buyers and sellers interact. The platform may be owned by a single large, or many small independent or vertically integrated intermediaries. We provide a positive and normative analysis of the impact of platform ownership structure on platform size. The strength of network effects is important in the ranking of ownership structures by induced platform size and welfare. While vertical integration may be welfare-enhancing if network effects are weak, monopoly platform ownership is socially preferred if they are strong. These are also the ownership structures likely to emerge.

Suggested Citation

  • Volker Nocke & Martin Peitz & Konrad Stahl, 2004. "Platform Ownership," PIER Working Paper Archive 04-029, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
    • Handle: RePEc:pen:papers:04-029
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    References listed on IDEAS

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    More about this item

    Keywords

    Two-Sided Markets; Network Effects; Intermediation; Product Diversity;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General

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