Ítem
Acceso Abierto
Competition in two-sided markets with common network externalities
Título de la revista
Autores
Bardey, David
Cremer, Helmuth
Lozachmeur, Jean-Marie
Fecha
2009-10
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Editor
Universidad del Rosario
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Métricas alternativas
Resumen
Abstract
We study competition in two sided markets with common network externality rather
than with the standard inter-group e¤ects. This type of externality occurs when both
groups bene t, possibly with di¤erent intensities, from an increase in the size of one
group and from a decrease in the size of the other. We explain why common externality
is relevant for the health and education sectors. We focus on the symmetric equilibrium
and show that when the externality itself satis es an homogeneity condition then
platforms pro ts and price structure have some speci c properties. Our results reveal
how the rents coming from network externalities are shifted by platforms from one side
to other, according to the homogeneity degree. In the speci c but realistic case where
the common network externality is homogeneous of degree zero, platform s pro t do not
depend on the intensity of the (common) network externality. This is in sharp contrast
to conventional results stating that the presence of network externalities in a two-sided
market structure increases the intensity of competition when the externality is positive
(and decreases it when the externality is negative). Prices are a¤ected but in such a
way that platforms only transfer rents from consumers to providers.
Palabras clave
Keywords
Two-Sided markets , Common Network Externality , Health , Education
