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
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (29)

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Related works:
Working Paper: Search Diversion and Platform Competition (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:33:y:2014:i:c:p:48-60

DOI: 10.1016/j.ijindorg.2014.02.008

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