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Strategic delegation in two-sided markets

  • Vitor Miguel Ribeiro

    ()

    (Vitor Miguel Ribeiro - FEP and CEF.UP - Vitor)

In a two-sided market duopoly, we investigate the effects of delegating long run restrictive and unrestrictive decisions to managers by the platforms' owners, the effects of the platforms' ownership establishing long run decisions without managers and the impacts of asymmetric regimes between platforms in terms of profitability, consumer surplus and total welfare. The fact that our analysis is focused on platforms introduces inter-group externalities. We find that for sufficiently low intensity of the inter-group externality, the owners of symmetric platforms should take the long run decisions by themselves. However, for an intermediate level of the inter-group externality, the owners of symmetric platforms should delegate the long run decision to their managers. Finally, for sufficiently high level of the inter-group externality, only tipping equilibria occur. Under an asymmetric environment, that is, one platform owner establishes long run decisions and the other owner delegate's long run decisions to their manager the long run decisions should be taken by the platform's owners.

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Paper provided by Universidade do Porto, Faculdade de Economia do Porto in its series FEP Working Papers with number 536.

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Length: 37 pages
Date of creation: May 2014
Date of revision:
Handle: RePEc:por:fepwps:536
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  1. Ambrus, Attila & Argenziano, Rossella, 2009. "Asymmetric Networks in Two-Sided Markets," Scholarly Articles 3204916, Harvard University Department of Economics.
  2. Jansen, Thijs & van Lier, Arie & van Witteloostuijn, Arjen, 2007. "A note on strategic delegation: The market share case," International Journal of Industrial Organization, Elsevier, vol. 25(3), pages 531-539, June.
  3. Toshihiro Matsumura & Noriaki Matsushima, 2009. "Regional restriction, strategic delegation, and welfare," ISER Discussion Paper 0761, Institute of Social and Economic Research, Osaka University.
  4. John Haltiwanger & Ron Jarmin & C. J. Krizan, 2010. "Mom-and-Pop Meet Big Box: Complements or Substitutes?," NBER Chapters, in: Cities and Entrepreneurship National Bureau of Economic Research, Inc.
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  13. repec:hrv:faseco:4589709 is not listed on IDEAS
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