Asymmetric Platform Oligopoly

Martin Peitz and Susumu Sato

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: We propose a tractable model of asymmetric platform oligopoly with logit demand in which users from two distinct groups are subject to within-group and cross-group network effects and decide which platform to join. We characterize the equilibrium when platforms manage user access by setting participation fees for each user group. We explore the effects of platform entry, a change of incumbent platforms’ quality under free entry, and the degree of compatibility. We show how the analysis can be extended to partial user participation.

Keywords: oligopoly theory; aggregative games; network effects; two-sided markets; two-sided single-homing; entry (search for similar items in EconPapers)
JEL-codes: D43 L13 L41 (search for similar items in EconPapers)
Pages: 93
Date: 2023-05, Revised 2024-09
New Economics Papers: this item is included in nep-com, nep-gth, nep-mic, nep-pay and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2023_428v3

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