Estimating Platform Market Power in Two-Sided Markets with an Application to Magazine Advertising

Minjae Song

American Economic Journal: Microeconomics, 2021, vol. 13, issue 2, 35-67

Abstract: In two-sided markets, two groups of agents interact through platforms. Because agents' decision to join a platform is affected by the presence of agents on the other side, their interactions create indirect network externalities and make platforms' strategies different from those of firms in one-sided markets. In this paper, I use a structural model to show that platforms may take a loss on one side of the market to make a profit on the other side and that platform mergers may benefit some agents by lowering prices or attracting more agents on the other side of the market.

JEL-codes: D62 G34 L82 M37 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (8)

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DOI: 10.1257/mic.20160052

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