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The Monopoly Benchmark on Two-Sided Markets

Christopher Müller and Enrico Böhme ()

Finnish Economic Papers, 2014, vol. 27, issue 1, 56-69

Abstract: The literature on the effects of market concentration in platform industries or two-sided markets often compares the competitive outcome against a benchmark. This benchmark is either the “joint management” solution in which one decision maker runs all platforms or a “pure” monopoly with just one platform. Literature has not generally discussed which benchmark is the appropriate one, i.e. how many platforms the monopolist will operate. In this paper we show that the optimal number of platforms depends on whether agents multi- or singlehome, whether the network externalities are positive or negative, and in some cases on the properties of the demand functions.

JEL-codes: D42 D43 K20 L12 L13 L51 (search for similar items in EconPapers)
Date: 2014
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Working Paper: The monopoly benchmark on two-sided markets (2011) Downloads
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Handle: RePEc:fep:journl:v:27:y:2014:i:1:p:56-69