Platform Competition: Who Benefits from Multihoming?

Martin Peitz and Paul Belleflamme

No 12452, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: Competition between two-sided platforms is shaped by the possibility of multihoming. If users on both sides singlehome, each platform provides users on either side exclusive access to its users on the other side. In contrast, if users on one side can multihome, platforms exert monopoly power on that side and compete on the singlehoming side. This paper explores the allocative effects of such a change from single- to multihoming. Our results challenge the conventional wisdom, according to which the possibility of multihoming hurts the side that can multihome, while benefiting the other side. This is not always true: the opposite may happen or both sides may benefit.

Keywords: Network effects; Two-sided markets; Platform competition; Competitive bottleneck; Multihoming (search for similar items in EconPapers)
JEL-codes: D43 L13 L86 (search for similar items in EconPapers)
Date: 2017-11
New Economics Papers: this item is included in nep-com, nep-mic, nep-pay and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: Platform competition: Who benefits from multihoming? (2019)
Working Paper: Platform competition: Who benefits from multihoming? (2019)
Working Paper: Platform Competition: Who Benefits from Multihoming? (2018)
Working Paper: Platform competition: who benefits from multihoming? (2017)
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