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Competing Matchmakers: An Experimental Analysis

Tanjim Hossain (), Dylan Minor () and John Morgan
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Dylan Minor: Kellogg School of Management, Northwestern University, Evanston, Illinois 60208

Management Science, 2011, vol. 57, issue 11, 1913-1925

Abstract: Platform competition is ubiquitous, yet platform market structure is little understood. Theory models typically suffer from equilibrium multiplicity--platforms might coexist or the market might tip to either platform. We use laboratory experiments to study the outcomes of platform competition. When platforms are primarily vertically differentiated, we find that even when platform coexistence is theoretically possible, markets inevitably tip to the more efficient platform. When platforms are primarily horizontally differentiated, so there is no single efficient platform, we find strong evidence of equilibrium coexistence. This paper was accepted by Peter Wakker, decision analysis.

Keywords: platform competition; two-sided markets; monopoly; e-commerce (search for similar items in EconPapers)
Date: 2011
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