Hybrid role of two-sided platform with one-sided congestion

Sangita Poddar and Banerjee (Chatterjee), Tanmoyee

Research in Economics, 2024, vol. 78, issue 1, 83-98

Abstract: The study investigates the hybrid role of a monopoly platform that serves as an intermediary to its two distinct sides, while also offering its own house brand products to its consumers. We attempt to understand the condition that leads a platform to prefer its own brand products over those of its rival sellers in presence of cross one-way congestion and cross-side network effects. Our model suggests that higher the price for a platform's product becomes, the more likely the monopoly platform prefers its own products over its sellers’ by transmitting higher levels of advertising signals and channeling more customers toward its own-label. We then compare the model variables under both the hybrid and pure-intermediary regimes and conclude that hybrid model may not necessarily generate anti-competitive outcomes in presence of cross-side effects.

Keywords: Two-sided platform; Hybrid; Congestion; Network externality (search for similar items in EconPapers)
JEL-codes: D21 D42 L22 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reecon:v:78:y:2024:i:1:p:83-98

DOI: 10.1016/j.rie.2024.01.003

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