Platform Competition in Two-Sided Markets with Single-Homing

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Platforms are prevalent in many markets. This paper considers two competing platforms and investigates pricing decisions in two-sided markets with network effects. The purpose of this paper is to examine fundamental concepts such as price-cost margins, market shares, and profitability in equilibrium. A slightly modified Hotelling model suggests the possibility that asymmetric platforms coexist, and a dominant platform with higher market shares earns a higher profit.

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