The tension between market shares and profit under platform competition

B-Tier
Journal: International Journal of Industrial Organization
Year: 2022
Volume: 81
Issue: C

Score contribution per author:

0.670 = (α=2.01 / 3 authors) × 1.0x B-tier

α: calibrated so average coauthorship-adjusted count equals average raw count

Abstract

We introduce asymmetries across platforms in the linear model of competing two-sided platforms with singlehoming on both sides and fully characterize the price equilibrium. We identify market environments in which one platform has a larger market share on both sides while obtaining a lower profit than the other platform. This is compatible with higher price-cost margins on one or both sides, noting that in the latter case one margin must be negative. Our finding raises further doubts on using market shares as a measure of market power in platform markets.

Technical Details

RePEc Handle
repec:eee:indorg:v:81:y:2022:i:c:s0167718721000990
Journal Field
Industrial Organization
Author Count
3
Added to Database
2026-01-24