Cournot Platform Competition with Mixed-Homing

HANDLE
  • Tremblay, Mark
    University of Nevada, Las Vegas; CESifo Research Network
  • Adachi, Takanori
    Graduate School of Management and Graduate School of Economics, Kyoto University
  • Sato, Susmu
    Institute of Economic Research, Hitotsubashi University

Description

Competition in quantity dates back to Cournot (1838) for traditional markets and Katz and Shapiro (1985) for markets with direct network effects. In this paper, we consider Cournot platform competition in two-sided markets with indirect network effects while allowing for single-, multi-, and mixed-homing allocations. We find that the markup and markdown terms that are typically found in monopoly two-sided pricing are distorted toward zero when platform competition intensifies. We also generalize the monopoly platform Lerner indices from Armstrong (2006) and Weyl (2010) to include competition and mixed-homing allocations. Lastly, we show that welfare decreases in the number of platforms for the most commonly considered homing allocations, highlighting how the welfare loss from breaking up a network across smaller platforms can outweigh the welfare benefits from lower aggregate prices in a setting where platforms are homogenous.

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Details 詳細情報について

  • CRID
    1050861228446696064
  • ISSN
    18737986
    01677187
  • HANDLE
    2433/286156
  • Text Lang
    en
  • Article Type
    journal article
  • Data Source
    • IRDB

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