Can a Platform Make Profit with Consumer' Mobility? A Two-Sided Monopoly Model with Random Endogenous Side-Swiching

Pierre Andreoletti (), Pierre Gaze () and Maxime Menuet
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Pierre Andreoletti: MAPMO - Mathématiques - Analyse, Probabilités, Modélisation - Orléans - UO - Université d'Orléans - CNRS - Centre National de la Recherche Scientifique
Pierre Gaze: LEO - Laboratoire d'Économie d'Orleans [UMR7322] - UO - Université d'Orléans - UT - Université de Tours - CNRS - Centre National de la Recherche Scientifique

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Abstract: We model a specific two-sided monopoly market in which agents can switch from a side to the other. We define two periods of time. In the first period, agents buy the platform services on each side and in the second period of time, they can possibly enhance their satisfaction by going to the other face of the platform. We analyze the link between mobility, consumer's utility, prices and profit. We show that mobility is a valuable feature which can be compared with an increase of product quality. Finally, the firm is able to capture the mobility in its monopoly's profit. The relative size of each group then appears as a strategical variable for the firm.

Keywords: externalities; side-switching; two-sided markets (search for similar items in EconPapers)
Date: 2015
New Economics Papers: this item is included in nep-com, nep-gth, nep-mic, nep-mkt and nep-net
Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-01206576v1
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Related works:
Working Paper: Can a Platform Make Profit with Consumers' Mobility? A Two-Sided Monopoly Model with Random Endogenous Side-Switching (2016)
Working Paper: Can a Platform Make Profit with Consumers' Mobility? A Two-Sided Monopoly Model with Random Endogenous Side-Switching (2015)
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