On the Existence of Nash Equilibria in Two-Sided Hotelling Models

Emanuele Bacchiega (), Elias Carroni and Alessandro Fedele
Additional contact information
Emanuele Bacchiega: Department of Computer Science and Engineering, University of Bologna, Italy

No BEMPS106, BEMPS - Bozen Economics & Management Paper Series from Faculty of Economics and Management at the Free University of Bozen

Abstract: The Hotelling model is the workhorse for analyzing platform competition in two-sided markets. In this setup, the degree of platform differentiation must be high relative to cross-group benefits to eschew the alleged non-existence of Nash equilibria. The present paper shows instead that Nash equilibria exist even for relatively low differentiation; at such equilibria, platforms avoid competition by replicating a collusive outcome. This result widens our knowledge of the two-sided Hotelling model and is relevant for a large array of markets --especially digital ones-- where platforms operate in relatively low-differentiation environments.

Keywords: Hotelling model; Platform competition; Two-sided markets; Equilibrium existence. (search for similar items in EconPapers)
JEL-codes: C72 D21 L13 (search for similar items in EconPapers)
Pages: [11 pages]
Date: 2024-06
New Economics Papers: this item is included in nep-com, nep-gth, nep-mic and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://repec.unibz.it/bemps106.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bzn:wpaper:bemps106

Access Statistics for this paper

More papers in BEMPS - Bozen Economics & Management Paper Series from Faculty of Economics and Management at the Free University of Bozen Contact information at EDIRC.
Bibliographic data for series maintained by F. Marta L. Di Lascio () and Alessandro Fedele ().