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Ecosystems and Complementary Platforms

Author

Listed:
  • Jeon, Doh-Shin
  • Lefouili, Yassine
  • Li, Yaxin
  • Simcoe, Timothy

Abstract

Motivated by several examples, including Internet of Things patent licensing, we develop a tractable model of multi-product ecosystems, where one or more platforms provide inputs to a set of devices linked through demand-side externalities. Prices depend on each device's Katz-Bonacich centrality in a network defined by the externalities, and we show how the relevant network differs for an ecosystem monopolist, a social planner, or a group of complementary platforms. We use the model to revisit Cournot's analysis of complementary monopolies in a platform setting, and to analyze a partial (one-sided) merger of complementary platforms.

Suggested Citation

  • Jeon, Doh-Shin & Lefouili, Yassine & Li, Yaxin & Simcoe, Timothy, 2023. "Ecosystems and Complementary Platforms," TSE Working Papers 23-1468, Toulouse School of Economics (TSE), revised Apr 2024.
    • Handle: RePEc:tse:wpaper:128468
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Multi-sided Market; Complementary Platforms; Network; Centrality; IoT; Licensing;
    All these keywords.

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