Two-sided markets with pecuniary and participation externalities
The existing literature on "two-sided markets" addresses participation externalities, but so far it has neglected pecuniary externalities between competing platforms. In this paper we build a model that incorporates both externalities. In our setup differentiated platforms compete in adver...
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| Format: | UnknownFormat |
| Sprache: | eng |
| Veröffentlicht: |
Munich
Univ., Center for Economic Studies u.a.
2006
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| Schriftenreihe: | CESifo working paper Industrial organisation
1776 |
| Schlagworte: | |
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Tag hinzufügen | Zusammenfassung: | The existing literature on "two-sided markets" addresses participation externalities, but so far it has neglected pecuniary externalities between competing platforms. In this paper we build a model that incorporates both externalities. In our setup differentiated platforms compete in advertising and offer consumers a service free of charge (such as a TV program) that is financed through advertising. We show that advertising can exhibit the properties of a strategic substitute or complement. Surprisingly, there exist cases in which platforms benefit from market entry. Moreover, we show that from a welfare point of view perfect competition is not always desirable. |
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| Beschreibung: | Literaturverz. S. 45 - 46 Internetausg.: http://www.cesifo-group.de/~DocCIDL/cesifo1_wp1776.pdf |
| Beschreibung: | 46 S. graph. Darst. |