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Search diversion and platform competition

Andrei Hagiu and Bruno Jullien ()

International Journal of Industrial Organization, 2014, vol. 33, issue C, 48-60

Abstract: Platforms use search diversion in order to trade off total consumer traffic for higher revenues derived by exposing consumers to unsolicited products (e.g. advertising). We show that competition between platforms leads to lower equilibrium levels of search diversion relative to a monopoly platform when the intensity of competition is high. On the other hand, if there is only mild competition, then competing platforms induce more search diversion relative to a platform monopolist.

Keywords: Search-diversion; Two-sided markets; Competition; Advertising; Exclusivity (search for similar items in EconPapers)
JEL-codes: D4 L1 L5 (search for similar items in EconPapers)
Date: 2014
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Related works:
Working Paper: Search Diversion and Platform Competition (2013) Downloads
Working Paper: Search Diversion and Platform Competition (2013) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:33:y:2014:i:c:p:48-60

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International Journal of Industrial Organization is currently edited by P. Bajari, B. Caillaud and N. Gandal

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