Multihoming and Oligopolistic Platform Competition

Tat-How Teh, Chunchun Liu, Julian Wright and Junjie Zhou

American Economic Journal: Microeconomics, 2023, vol. 15, issue 4, 68-113

Abstract: We provide a general framework to analyze competition between any number of symmetric two-sided transaction platforms, in which buyers and sellers can multihome. We show how key primitives such as the number of platforms, the fraction of buyers that find multihoming costly, the value of transactions, and the degree of user heterogeneity jointly determine the level and structure of platform fees. Even though platform entry always reduces the total fee level, whether it shifts the fee structure in favor of buyers or sellers depends on whether most of the buyers are singlehoming or multihoming.

JEL-codes: D43 L11 L13 L40 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:aea:aejmic:v:15:y:2023:i:4:p:68-113

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DOI: 10.1257/mic.20210324

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