Platform Oligopoly with Endogenous Homing: Implications for Mergers and Free Entry
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- Adachi, Takanori
- Graduate School of Management and Graduate School of Economics, Kyoto University
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- Sato, Susumu
- Institute of Economic Research, Hitotsubashi University
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- Tremblay, Mark J.
- Lee Business School, University of Nevada, Las Vegas
Abstract
Consumer multi-homing is critical for competition policy regarding digital platforms. To assess the role of multi-homing, we embed endogenous homing into a model of oligopolistic competition between two-sided platforms and apply it to mergers and free entry. We find that the required merger-specific cost reduction is larger if consumers benefit more from multi-homing and that the equilibrium level of platform entry can be insufficient in the presence of consumer multi-homing. These results contrast the belief that multi-homing mitigates the need for stricter policy. We also show that reductions to sellers' benefit from multi-homing reduces entry (is an effective entry barrier).
Journal
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- Journal of Industrial Economics
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Journal of Industrial Economics 71 (4), 1203-1232, 2023-12
Wiley
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Details 詳細情報について
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- CRID
- 1050298510567694336
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- ISSN
- 14676451
- 00221821
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- HANDLE
- 2433/286380
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- Text Lang
- en
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- Article Type
- journal article
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- Data Source
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- IRDB