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Superstars in two-sided markets: exclusives or not?

Elias Carroni (), Leonardo Madio () and Shiva Shekhar

No 7535, CESifo Working Paper Series from CESifo Group Munich

Abstract: This article studies incentives for a premium provider (Superstar) to offer exclusive contracts to competing platforms mediating the interactions between consumers and firms. When platform competition is intense, more consumers subscribe to the platform hosting the Superstar exclusively. This mechanism is self-reinforcing as firms follow consumer decisions and (some) join exclusively the platform with the Superstar. Exclusivity always benefits firms and may benefit consumers. Moreover, when the Superstar is integrated with a platform, non-exclusivity becomes more likely than if the Superstar was independent. This analysis provides several implications for managers and policy makers operating in digital and traditional markets.

Keywords: exclusive contracts; platforms; two-sided markets; ripple effect; content providers; market power (search for similar items in EconPapers)
JEL-codes: L13 L22 L86 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com, nep-cta, nep-cul, nep-ict, nep-ind, nep-mic and nep-pay
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed

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