Platform competition and willingness to pay in a vertical differentiated two-sided market

Francesco Angelini, Corrado Benassi and Massimiliano Castellani ()
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Massimiliano Castellani: Department of Statistical Science "Paolo Fortunati", University of Bologna

Economics Bulletin, 2021, vol. 41, issue 2, 772-780

Abstract: In this paper we generalize the model of single-homing users in two-sided markets by Gabszewicz and Wauthy [2014] to the case of any logconcave distribution of the willingness to pay (WTP). Our extended model allows us to discuss how distributional assumptions affect equilibrium outcomes, as well as to highlight the role of the assumption that both sides of the market are described by the same distribution of the WTP: while equilibrium does exist when this common distribution is logconcave, our results cast some doubts on existence when the two distributions differ.

Keywords: Two-sided market; Network externalities; Vertical differentiation; Income distribution. (search for similar items in EconPapers)
JEL-codes: D3 D4 (search for similar items in EconPapers)
Date: 2021-04-09
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