The tension between market shares and profit under platform competition

Paul Belleflamme, Martin Peitz and Eric Toulemonde

International Journal of Industrial Organization, 2022, vol. 81, issue C

Abstract: We introduce asymmetries across platforms in the linear model of competing two-sided platforms with singlehoming on both sides and fully characterize the price equilibrium. We identify market environments in which one platform has a larger market share on both sides while obtaining a lower profit than the other platform. This is compatible with higher price-cost margins on one or both sides, noting that in the latter case one margin must be negative. Our finding raises further doubts on using market shares as a measure of market power in platform markets.

Keywords: Two-sided platforms; Market share; Market power; Oligopoly; Network effects; Antitrust (search for similar items in EconPapers)
JEL-codes: D43 L13 L86 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Related works:
Working Paper: The tension between market shares and profit under platform competition (2022)
Working Paper: The Tension Between Market Shares and Profit Under Platform Competition (2020)
Working Paper: The Tension Between Market Shares and Profit Under Platform Competition (2020)
Working Paper: The tension between market shares and profit under platform competition (2020)
Working Paper: The tension between market shares and profit under platform competition (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:indorg:v:81:y:2022:i:c:s0167718721000990

DOI: 10.1016/j.ijindorg.2021.102807

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