Note on ‘Competition in Two-sided Markets’
We extend the models in ("Competition in two-sided markets" of Armstrong (2006, Rand Journal of Economics ) by adding within-group externalities. In the monopoly and duopoly cases, positive within-group externalities reduce the price of the own group. Negative externalities have an opposite price effect. In the case of a competitive bottleneck, we show by examples that within a certain range of parameter values, a novel phenomenon arises that the platform attracts more agents from one of the groups compared with the social optimum.
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- 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.
- Van Cayseele Patrick & Reynaerts Jo, 2011.
Review of Network Economics,
De Gruyter, vol. 10(1), pages 1-33, March.
- Jo Reynaerts & Patrick Van Cayseele, 2007. "Complementary Platforms," LICOS Discussion Papers 18607, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
- Patrick VAN CAYSEELE & Jo REYNAERTS, 2007. "Complementary platforms," Working Papers Department of Economics ces0721, KU Leuven, Faculty of Economics and Business, Department of Economics.
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