The tension between market shares and profit under platform competition

Martin Peitz, Paul Belleflamme and Eric Toulemonde

No 15204, CEPR Discussion Papers from Centre for Economic Policy Research

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 platform enjoys a competitive advantage on one or both sides. 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: 2020-08
New Economics Papers: this item is included in nep-com, nep-gth, nep-mic, nep-pay and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: The tension between market shares and profit under platform competition (2022)
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)
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